Proposal for Pre & During Disbursement Services

The following is a great post from Mr.Prakash P. Joshi. I am very thankful to him for his great effort behind creating this article. You can contact him on ppj_2001@yahoo.com

PROPOSAL (OFFER) ABOUT OUR EXPERT PROFESSIONAL SERVICES REGARDING POST SANCTION>>>PRE\DURING DISBURSEMENT/RELEASE OF FUNDS/LIMITS STAGE

In the present competitive environment Sanctioning of the sound and healthy Credit Portfolio only is not enough but, to ensure its timely disbursal / release, for receiving / earning Interest and other income out of it, is equally important in the Banking Industry.

At times, due to sheer Volume (Value & Number wise Accounts) coupled with scarcity of personnel in the Credit function Deptt. The Bank even though, clearly understanding the urge to do so, is unable to give proper and timely justice to this task in day to day activities.

In order to make this important task easy, effective, meaningful, economical and speedy for the Bank, our Company has developed a very efficient and useful “System & Procedure” which, we hereby offer you for the benefit of the Bank. We request you to go thru it and offer your Valuable opinion / comments / suggestions.

The brief highlighted details of the same are enumerated and explained below. We can also alter / amend / modify it exactly as per your specific requirements and thus can be just tailor-made suitable for your Bank, if required.

BRIEF HIGHLIGHTED DETAILS OF MODUS OPERANDI

Once the Detailed Final Sanction Letter / Advice / Ticket is duly issued to the applicant Borrower for various Fund + Non Fund based Loan / Limit(s) ; we may please be handed over with its copy along with all the supporting & relevant papers / documents / data / information {File} for doing onward needful. . On receiving the same and after going thru it carefully WE SHALL, ON BAHALF OF THE BANK >>>>

1] Keep ourselves ready to support / facilitate Bank for timely disbursal / release of the already sanctioned Loan / Limit(s) in the most appropriate manner assuming, that all the relevant “Legal Documentation Execution Formalities” are completed to the satisfaction of the Legal Deptt. of the Bank.

2] Obtain acknowledgment and confirmation (if, not already on record) from the Borrower to the effect that all the contents, terms & conditions mentioned in the said Letter are agreed upon and accepted in toto by the Borrower in a rightful way. Also verify and confirm that the loan Processing Fees (balance, if any) and Other Incidental Fees / Charges have been received as per the policy of the Bank.

3] Verify and ensure from the submitted C.A. Certificate and Valuation Report that the desired “Margin” money has been actually introduced by the borrower in the business as per terms & conditions of Sanction. It is advisable that the entire margin money as envisaged in the project scheme may please be insisted to be brought first by the borrower which will, possibly avoid cost and time overrun. Further, after obtaining such margin money along with matching Bank loan Funds, the disbursement may also be made directly to the desired end use destination to avoid possible problems.

4] Verify & ensure the “Credentials” of the Capital Goods Suppliers of especially, in case of Project Finance cases (if, desired by the Bank).

5] Make Site / Plant / Office visit(s) for physical verification of the actual creation of Assets / Properties as on the date of such visit vis-à-vis read with point No. 3 above.

6] Verify & ensure that proper and timely “Charge” over the “Securities” financed / collateralized by the Bank, has been created & noted with appropriate Competent Authority in favor of the Bank.

7] The “Securities” {Fixed Assets and / or Stocks} bears the Name Plate denoting properly, the “Charge” of the Bank.

8] Obtain & provide Photographic proof as regards to point No. 5 & 7 mentioned above.

9] Verify & ensure that proper & desirable risk cover “Insurance” policy(ies) in respect of all the Assets / Properties financed / collateralized by the Bank , with Bank Clause for appropriate amount(s) have been obtained by the Borrower and the ORIGINAL Policy Document(s) have been handed over to the Bank for the safe custody.

10] Verify & confirm that the Sanctioned Funds have not been diverted and in reality, have gone to the desired end use as proposed.

11] Observe and understand how the Current Assets {especially Sundry Debtors (trade), Advance paid to Suppliers, Inventory etc...}AND Current Liabilities {especially Sundry Creditors (trade), Advance received from Customers etc...} level [its pace & style] is being built up and understand the typical overall Working Capital Cycle {including Non Fund based requirements / facilities if any} of the Borrower [its normal & average time frame] in case of the borrowers’ A/C is not a going Concern / Company and also when the it is a take over case from other Bank. Any unusual variations, if observed, over a period of time to be got clarified & reported for monitoring and control purpose.

12] Any other specific task area desired by you.

We do understand that many a times the actual disbursement / release of Sanctioned Funds is made in trenches as per the progress of the project which requires / entails number of visits and repetitive connected procedural work during the said period however, we shall meticulously observe the appropriate & desirable system in this behalf all the time.

AREA OF OUR OPERATIONS [As lump sum in advance please!]

Presently Mumbai Zone comprising of geographical territory falling between Colaba to Virar / Khopoli (via Karjat) / Kasara / Panvel i.e. where presently local suburban train services are available. {This may, in future, extend up to Dahanu Road also}

OUR PROFESSIONAL CHARGES

A] Rs. 18,000/-{Rupees Eighteen Thousand only} per case (proposal) for the various Loan\Credit Limit(s) totally comprising up to Rupees 500.00 Lakhs.

B] Rs. 24,000/-{Rupees Twenty Four Thousand only} per case (proposal) for the various

Loan\Credit Limit(s) totally comprising over Rupees 500.00 Lakhs.

[However, if, in a particular local case (proposal) it is felt necessary to visit outside the aforesaid mentioned area, we reasonably expect that the Bank will facilitate & arrange to provide the needful inputs to us in an appropriate manner]

Our availability will be on time, with reasonable advance notice, as and when necessary during this period, as required by the Bank.

WE NOW LOOK FORWARD FOR OUR LONG TERM RELATIONS

FOR OUR MUTUAL BENEFIT.

THANK YOU!