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SBI Loan for Hotels Restaurants and Travel Agents

Loan for Hotels

SBI Loan for Hotels, Restaurants and Travel Agents

SBI operates a specialised loan scheme for travel agents called Paryatan Plus. Under the Paryatan Plus loan scheme, loan is provided for hotels, restaurants, tour operators, travel agents and others involved in the travel and tourism industry. In this article, we look at the SBI Paryatan Plus Loan Scheme in detail.

State Bank of India (SBI)

State Bank of India (SBI) is the largest Indian multinational, public sector banking and financial services company – headquartered in Mumbai, Maharashtra. As of 2016-17, State Bank of India (SBI) has assets of Rs. 30.72 trillion (US$460 billion) and more than 18,000 branches, inclusive of 191 foreign offices spread across 36 countries, making it the main banking and financial services company in India by assets. The company is rated 232nd on the Fortune Global 500 list of the world’s largest corporations as of 2016.

The SBI Group comprises of SBI and five associate banks. The total SBI Group combined has an widespread network, with over 22000 plus branches in India and more than 190 offices in 38 other countries across the world. As of 31st March 2016, the group claimed assets greater than USD 500 billion and capital and reserves exceeding USD 25 billion. SBI commands over 1/5th market share of the Indian banking sector

SBI Paryatan Plus Loan Scheme

Under the State Bank of India (SBI) Paryatan Plus loan scheme, loan is provided for:

  • Construction or Renovation or Modernization or Expansion of hotels rest houses and guest houses.
  • Construction of office premises, buying of office equipment and computers by travel agents or tour operators.
  • Buying of vehicles (Luxury buses, Coaches, Cars, Vans) 
  • Buying of house boats and luxury boats
  • Building and operating of restaurants or coffee houses or ice-cream parlors or fast food centers, amusement parks or rope ways, health clubs or spas, et cetera.

Type & Amount of Loan

Under the scheme, loan is provided as a cash credit or term loan or letter or credit or bank guarantee or combined, based on the requirements and repayment capacity of the borrower. Margin money of 20% must be brought-in by the promoters for all end-uses, except for the purchase of old vehicles. In case of purchase of old vehicles less than 5 years old, 40% margin money is required form the customer.

Repayment & Security

Under the scheme, the term loans are sanctioned for a period of 3 to 7 years, with a moratorium or startup period not exceeding 18 months. Any working capital facility sanctioned in the form of a cash credit or letter of credit is renewable each year and is repayable on demand.

As always, hypothecation of assets that are financed by the bank under the scheme is a must. Further, based on the quantum of loan, tangible collateral like land, building, bank fixed deposits, LIC policies and so on – corresponding to 50% of the total loan amount would be requested. Collateral security would be a must for all loan over Rs.1 crore, as CGTMSE coverage would not be available.