1

Scheme

Financing property owners against future lease rentals

2

Purpose

Personal or Business and for Lawful Purposes. Not for speculative purpose.

3

Eligibility

Property owners having their property situated in Metro/ Urban Area / Semi-Urban areas, who have let out /leased their property under registered lease deed /sub- lease deed / rent deed to Govt./ Semi Govt./ Public Sector Undertakings/Reputed Corporations / Banks/ Financial Institutions/ Insurance Cos./ Multinational Companies etc.

Deviation powers delegated to Regional Managers/Senior Regional Managers to finance Property owners having their property situated in Metro/ Urban Area / Semi-Urban areas, who have let out /leased their property under registered lease deed /sub- lease deed / rent deed to reputed public/private ltd companies / partnership firms / proprietorship firms with good track record.

4.

Nature of Facility

Term Loan or  Overdraft

5.

Loan Amount

Term Loan or Overdraft to the extent of

1.      75% of the Future Lease Rental Receivables where un-expired lease period is three years and less, maximum Rs.10.00 crore.

2.      65%of the Future Lease Rental Receivables where un-expired lease period is more than three years but not exceeding 6 years, maximum Rs.10.00 crore.

3.      55% of the Future Lease Rental Receivables where un-expired lease period is more than six years but not exceeding 8 years, maximum Rs.10.00 crore.

4.      50% of the Future Lease Rental Receivables where un-expired lease period is more than 8 years but not exceeding 10 years, maximum Rs.10.00 crore.

Future Lease Rent Receivables = Gross rent Receivables less (advance rent received + property tax + income tax + other statutory dues of the lessor)

5

Security

-Assignment of future rent receivables in favor of bank.

-Equitable Mortgage of any property of the borrower value of which  

  should be to the extent of 

• 100% of proposed loan in case the loan is repayable within 36 months.

• 133% of proposed loan in case the loan repayable beyond 36 months.

• 200% of proposed loan in cases where there is difficulty in entering in to an agreement with the tenants to assign the future rentals.

6.

Guarantee

Personal Guarantee of joint/ co-owner of the property (if any).

Personal guarantee of all Directors other than Nominated/Professional Directors (in case of Corporate Borrowers).

7

Insurance

Borrower/s to keep the insurance for the full market value of the property to be mortgaged in the name of the borrower/s with bank clause, against risk of damage, loss, destruction by fire and such other risks as may be prescribed by the bank and keep up such insurances live until the amount due under the Term Loan of the bank is paid in full.

8

Repayment

Term Loan:

Repayable in Maximum 120 months or within the unexpired lease period, whichever is lower. The entire portion of monthly rent receivables will be credited into loan account every month.

Overdraft:

The Overdraft facility will also be for maximum period of 120 months or the unexpired lease period whichever is lower. The entire portion of monthly rent receivables will be credited into loan account every month

The Drawing Power in the Overdraft limit will be reduced on monthly basis to the extent of pre calculated monthly rent receivables.

The account will be closed / adjusted at the time of expiry of lease period by virtue of monthly diminishing Drawing Power.

9

Interest Rate

Base Rate + 3.00% for loan up to 3 years. (10.25+3.00=13.25%)

Base Rate +3.50% for loan above 3 years. (10.25+3.50=13.75%)

10

Processing Fee

1 % of the loan amount subject to minimum of Rs.5, 000/- and maximum of   Rs.2.00 lakh.

11

Borrower's obligations

All obligations as lesser under the lease to be fulfilled by the borrower.  Borrower shall be responsible for up keeping of the property, payment of all taxes, insurance premium etc.