ITEM NO. |
PENAL INTEREST |
(i) |
Cash Credit Limits:
Irregularity in cash credit account
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Continuously irregular for a period beyond 60 days – 2 % on the entire outstanding.
In other cases – 2 % on the irregular portion.
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(ii)
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Non-Submission of stock statement |
1 % for the month if the stock statement is not submitted within the stipulated period.
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(iii)
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Non-submission of renewal data
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1 % for the delay beyond 3 months from the date renewal was due.
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(iv)
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Non-compliance with covenants |
Non-compliance with covenants.
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(v)
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TERM LOANS :-
(a) Non-payment of interest/instalment
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2 % on the entire outstanding for the period of default.
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(b) Cross-default *
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2 % on the entire outstanding for the period of default.
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( c) Adverse deviation by more than 20% from stipulated level I respect of any two of the following items :-
CURRENT RATIO, TOL/TNW, INTEREST COVERAGE RATIO
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1 % for the period of non-adherence for a minimum period of 1 year.
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• Submission of stock statements – delay beyond 10 days of the succeeding month to be considered as non-submission. |
• The aggregate penal interest on account of non-compliances not to exceed 3 % in aggregate. |
• Sick units under rehabilitation and non-compliance on account of natural calamities/extraneous reasons-Penal interest not to be levied. |
* What Does Cross Default Mean?
A provision in a loan agreement that puts the borrower in default, if the borrower defaults on another obligation.
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