Cash Credit Traders

Cash Credit Traders

Name of the Scheme

Cash Credit Facility to Traders and Others
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.1

These Rules shall be called The Punjab State Coop.Bank / Central Coop.Bank rules for granting Cash Credit Facility to Traders and others.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.2

  1. The bank means The Punjab State Coop.Bank Ltd., or Central Coop.Banks of Punjab.

(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

  1. The Board of Directors and the Executive Committee means the Board of Directors and Executive Committee constituted under the Bye-laws of the Bank.
  2. Authorised Officer means the Officer authorized by the BOD/Executive Committee of the Bank to receive and take appropriate action on the applications for loans under the scheme.
  3. Borrower means and individual, sole proprietor, firm, cooperative society or a company doing manufacturing/ trading business/providing services having an assured income.

(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

  1. Cooperative Societies Act means The Punjab Cooperative Societies Act,1961 as amended from time to time.
  2. Cooperative Societies Rules means the Punjab Cooperative Societies Rule, 1963, as amended from time to time.
  3. Bye-laws means the bye-laws of the Fatehgarh Sahib Central Cooperative Bank Ltd., Sirhind.
  4. Registration means the Registration under the Shops Act or under the Company's Act.

Rule No.3

Cash Credit Facility under the Scheme shall be granted for meeting working capital requirements.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.4

The applicant should not have availed cash credit facility from any other financial institution for the purpose.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.5

The maximum amount of Cash Credit Limit under these Rules shall be Rs.25 lac.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.6

The application for cash credit limit shall be made by the borrower on the prescribed form of the bank.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.7

The sanctioning of the Cash-Credit by the Bank shall be made only in case it is satisfied of the viability of the Project /proposal.

Rule No.8

The borrower shall hypothecate in favour of the bank the entire current assets created besides collateral security of the value of 150% of the Cash Credit Limit sanctioned. Limit upto Rs.50,000/- may be granted with two good sureties only and hypothecation of stock/assets with the Bank.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.9

The borrower shall produce clear marketable title to the property to be mortgaged in favour of the bank to the satisfaction of the bank.

Rule No.10

The licenced contractors approaching the Bank for Cash-Credit Facility should give a power of Attorney in favour of the Bank to receive the cheque from Government/Quassi Govt. Institutions and to encash the same.

Rule No.11

The Bank shall be at liberty to call for additional/collateral security/securities at any time.

Rule No.12

The legal expenses, fee, registration charges and other incidental charges incurred in connection with the financing shall be borne by the borrower.

Rule No.13

Rate of interest as may be fixed by the bank from time to time shall be paid by the borrower at quarterly rests. In case of default in the repayment of dues to the bank additional interest of 2% p.a. will be charged for the defaulted amount for the period of default.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.14

The borrower shall maintain the books of account as prescribed by the bank. Borrower shall furnish stock statement as per following periodicity indicating the opening stock, purchases, sales and closing stock.
Amount of limit upto Rs.1 lac – Quarterly
Above Rs.1 lac                       – Monthly

 

    
Failure to furnish stock statements will attract penal interest @ 2% p.a. on outstanding amount for period of non-submission of statements.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07) 

Rule No.15

The Cash Credit Limit sanctioned should be kept current by regular drawls and repayments. In other words, the business transaction of the unit should be deposited in the Cash Credit Account.

Rule No.16

The Cash Credit Limit shall be sanctioned for a period of one year. Renewal of the Cash Credit Limit will be allowed by the bank at its discretion based on the performance of the unit and also the operation in the cash credit limit account. Aggregate credits during the year in the limit account should be two times of the sanctioned limit or highest availed limit.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.17

The borrower should insure the assets created out of loan and the policy should be in the joint name of the borrower and the bank with agreed bank clause.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.18

The Borrower shall execute all the loan documents prescribed by the bank.

Rule No.19

Deleted.

Rule No.20

The borrower shall agree to be bound by the provisions regarding arbitration in the cooperative Societies Act and Cooperative Societies Rules.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.21

The Borrower should become the nominal member of the bank by paying necessary membership fee as fixed by the Bank.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.22

Whenever the borrower fails to discharge the loan as agreed upon the Bank should take legal action against him to recover the loan outstanding with interest and cost. The borrower shall be liable to make good of the expenses and legal charges that has been incurred by the Bank in this regard.

Rule No.23

Processing fee @ 0.25% shall be charged at the time of sanctioning of the C.C. limit. These charges of 0.25% shall be levied every year.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)

Rule No.24

Margin at the rate of 25% shall be maintained on the present value of stock.
(amended vide RCS Circular letter No.Credit/CA-2/139/14923 dated 11.10.07)