In these policy guidelines, unless there is
anything repugnant to the subject or context:
“Corporation” means JAMMU AND KASHMIR
DEVELOPMENT FINANCE CORPORATION LIMITED.
“Board of Directors” means the Directors for the
time being of the Corporation.
“Executive Committee” means the committee
comprising of the Managing Director and two
Directors on the Board as nominated by the Board
of Directors of the Corporation.
“Term Loan” means Loan granted by the
Corporation for setting up of an industrial
project repayable in more than one year but less
than 10 years.
“Consortium Financing” means joint financing by
a group of FIs/ Banks where the major financing
agency acts as a leader. The charge on assets is
created on pro-rata basis.
“Unsecured Loan” means such loan against which
no security is available and the loan, if
forming part of the means of finance, shall be
interest free and shall not be repayable during
the currency of the term loan of the
“Up-Front Fee” means the fee received from the
loanees against disbursement.
Spread” means the mark up/discount that the
Corporation shall be allowing on the prime
lending rate based on the credentials of the
prospective borrowers and the project.
First Investment Clause” means
100% investment of the promoter’s contribution
before release of first disbursement by the
2. Quantum of loan
In order to cater to the needs of
entrepreneurs for accelerating the
industrial development in the State and with a view
to reach to a majority of budding and existing
entrepreneurs, the Corporation is extending lending
facility in the range of Rs. 0.50 lakh to Rs.
1500.00 lakhs. The term lending limit is same in
case the Corporation enters into a consortium
arrangement with other banks in the State.
3. Debt- Equity Ratio
Debt Equity Ratio shall be 65:35
normally. However. the sanctioning authority shall
be competent to relax the requirement to allow Debt
Equity Ratio upto 3:1 with minimum contribution of
25% of the project cost by the promoter.
4. Application Fee
The Corporation shall charge an
application fee of Rs. 1000/- + GST as as cost of application
which shall be adjustable against the processing fee
to avoid non serious applicants. The application fee
shall have to be deposited with the Corporation
against the proper receipt at the time of issue of
checklist of formalities and loan application form.
5. Processing Fee
|The Corporation shall charge
processing fee as per the structure given here
-upto loan of Rs 25.00 lac Rs
-above Rs 25.00lac to Rs. 50.00 lac Rs.5,000/-
-above Rs 50.00lac to Rs. 75.00 lac Rs.7,500/-
-above Rs 75.00lac to Rs 100.00 lac Rs.10,000/-
-above Rs.100.00lac to Rs.150.00lac Rs.12,500/-
-above Rs.150.00lac to Rs.250.00lac Rs.15,000/-
Rs.250.00lac to Rs.350.00lac Rs.20,000/-
Rs.350.00lac to Rs.450.00lac Rs.25,000/-
Rs.450.00lac to Rs.550.00lac Rs.30,000/-
Rs.550.00lac to Rs.650.00lac Rs.35,000/-
Rs.650.00lac to Rs.750.00lac Rs.40,000/-
Rs.750.00lac to Rs.850.00lac Rs.45,000/-
Rs.850.00lac to Rs.1000.00lac Rs.50,000/-
plus GST as applicable
The processing fee shall have to
be deposited with the Corporation at the time of
submission of loan application form. The application
fee deposited at the time of issue of application
shall be adjustable against processing fee. In case
the loan is not sanctioned in favour of the
applicant(s) due to certain reasons,75% of the
processing fee will be refunded.
6. Up-Front Fee
No upfront fee shall be charged
for Term loans upto Rs. 25.00lac. Term loans beyond
Rs. 25.00lac & upto 100.00lac shall attract upfront
fee @ 0.375% of the Term loan sanctioned plus GST; Term loans
beyond Rs. 100.00lac shall attract an upfront fee of
0.75% of the term loan sanctioned plus GST. The upfront fee
paid shall be non-refundable.
7. Interest Rate
The rate of interest will be
charged by the Corporation equal to the State Bank
of India's Marginal Cost of Fund Base Lending Rate (MCLR)
for 1 year tenor as revised from time to time for
all lending cases.
The Corporation shall be
charging 2% as liquidity damage on the principal
default and 2% penal interest on the interest
default for the period and amount of default. A
grace period of 10 days shall be allowed from the
due date and in case the borrower fails to deposit
the Principal installment / Interest due within the
grace period, liquidity damage / penal interest
shall be charged from the due date of principal
installment / interest respectively.
9. Billing of Principal/Interest
The Corporation shall raise
interest bills at quarterly rests and interest shall
be payable on 30th of June, 30th of Sept., 31st of
Dec. and 31st of March every financial year. The billing date for principal amount shall be reckoned
on the basis of the repayment schedule as per the
documents executed and shall vary from case to case.
10. Disbursement of Loans
The Corporation shall be adopting
“First Investment by Borrower approach” whereby the
prospective borrower shall in first instance has to
invest in full his contribution and unsecured loans,
if any, forming part of the means of finance. The
Corporation shall thereafter release its loan
component on the basis of borrower’s requisition
after proper verification of the funds invested in
the project. No deviation shall be allowed without
the prior approval of the competent authority. The
first investment approach is to safe guard the
interests of the Corporation and at the same time
ensure timely implementation of the project.
All the payments to plant and
machinery suppliers shall be released by the
Corporation. No advance payment made to the plant
and machinery supplier shall be taken into account
while calculating eligible disbursement until and
unless the advance so made to the supplier has prior
approval of the Corporation.
All the disbursements shall be
released only after being satisfied about the proper
utilization of funds invested by the borrower under
First Investment clause or the amounts released by
the Corporation as its share.
The loan shall be granted against
the mortgage of Land, Building, Plant and Machinery
and other fixed assets. The necessary revenue
documents in respect of land free from all
encumbrances shall have to be deposited with the
Corporation with charge of the Corporation
registered with the concerned revenue and other
designated authorities. In case of lease hold land,
the lease deed valid for a period double the
currency of loan will be entertained subject to the
condition that the lease hold rights permit the
lease holder to mortgage or transfer these lease
hold rights to the Corporation giving unambiguous
powers to it (JKDFC) to transfer or sell the leased
land in case of default or foreclosure.
The Corporation shall be
extending term loans against the collateral security
in the form of Land, Building and Fixed deposits of
scheduled banks. No loan facility will be granted by
the Corporation without collateral security. The
proposed percentage of collateral security of the
loan sanctioned for different categories of
borrowers is given below:
-upto Rs.50.00 lacs 100% of the loan amount
-above Rs 50.00 lac to Rs 150.00 lac 75% of the loan
amount with a minimum of Rs.50.00 lac
-above Rs.150.00 lac to Rs.1500.00 lac 50% of the
loan amount with a minimum of Rs.112.50 lac
In case of Commercial Transport the collateral will
be 60% of the loan amount.
However in respect of the loan cases where the value
of primary security is atleast two times (two
hundred percent) of the quantum of loan, the
provision of further collateral security shall not
be insisted upon.
Loan cases upto Rs. 50.00 lakh can be considered
under Guarantee cover of CGTMSE against the payment
of one time Guarantee fee of 1.5% of the loan amount
& an annual service fee of 0.75% p.a of the
sanctioned amount during the tenure of loan.
12. Sanctioning Authority
The Corporation shall adopt the
collective approach for the sanction of the loans.
Various committees at different levels shall sanction
the loans depending upon the quantum of the loan. The
committees and their sanctioning powers are discussed
comprising of the Managing Director,& two other directors on the Board of
the Corporation (viz Principal Secretary, Department
of Finance & Principal Secretary, I&C Department,
Govt. of UT of J&K). All cases approved by the
Executive Committee to be taken up in BOD meeting
Loans above Rs.500.00lac to Rs.1500.00lac
||Management committee to be headed by
the Managing Director with
General Manager, Deputy General Manager/
Asstt. Gen. Manager & a manager as members.
Loans upto Rs.500.00lac
The sanctioning authority shall be the authority to relax any
condition governing the sanction of the loan.