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DOCUMENTATION

When our sanction becomes commitment when you deposit processing charges.

 

Processing charges are collected to meet a part of the cost of the preparation and finalization of loan documents, valuation, inspection of assets, etc. After this you are not to bother about any expenses incurred in valuation/inspection etc. in connection with disbursement of loan.

 

With a view to facilitate the entrepreneurs our Corporation has delegated the powers for execution of documents to the filed offices. You will have to get in touch with the concerned branch within whose jurisdiction your unit falls for getting the documents executed immediately after the loan is sanctioned to you.

 

In case of jointly financed units in association with RIICO or other financial institutions, documents would be executed at HO.

A list of document generally required by RFC before execution of loan agreement is given under the head Documents Required Before Execution of Loan Documents. However, we may need some additional documents also for fulfillment of any special terms & conditions for which appropriate advice will be duly conveyed.

The Corporation has prescribed standard forms for loan documents for creation of equitable mortgage, hypothecation of assets and for fulfillment of various terms and conditions of loan. In case of joint financing, the draft for joint agreement is finalized by the lead institution in consultation with other participating financial institutions.

Loan documents are required to be executed by the proprietor (in case of proprietorship concern), all the partners (in case of partnership firm) directors and officers as may be authorized under the Articles of Association of the company (in case of limited companies/ Public Limited Company/Private Personal Company). However, if any of the partners is not in a position to be present at the time of documentation some other partner(s), duly authorized under Special Power of Attorney can execute documents.

Loan documents should be executed at the earliest possible but not later than three months from the date of letter of sanction, failing which the sanction will lapse.

Normally we insist that the documents are executed within stipulated period. The need for timely execution of documents is essential to avoid any over run by way of delay in project. In certain cases if you are unable to execute the documents within 3 months from the date of sanction for reasons which are beyond your control, then in such cases we do consider and grant reasonable extension in the period for execution of documents.


 

Appropriate powers have been delegated to Field Offices to extend this period to a reasonable extent. You should invariably approach the concerned Branch Manager for seeking necessary extension.

  • Conveyed your acceptance of the terms & conditions of loan and fulfilled them within 30 days of convey of sanction.
  • Deposited Processing charges, and
  • Executed the required loan documents.

 

 

 

 

 

 

DISBURSEMENTS

When disbursement starts
Disbursement of sanctioned loan will start after execution of loan documents.

Where disbursement is made

Disbursement in all loan cases irrespective of loan amount is made from branch offices except in joint finance cases. In joint finance cases, the disbursement is made at HO.


Procedure for disbursement of loan

Token Disbursement is made on the date of Execution of loan documents. Disbursement of loan is made after ensuring own capital contribution and unsecured loans have been raised in full by the promoter which is corroborated by C.A. certificate.

(i) Disbursement against Land: - 
Disbursement of loan against land is made on the basis of payment receipts submitted by the loanee unit for purchase of land/conversion charges paid to State Govt./RIICO.

(ii) Disbursement against Building: - 
Disbursement of loan against construction of building is made on the basis of valuation of building and construction material lying at factory site.

(iii) Disbursement against Plant & Machinery: - 
Disbursement of loan against Plant & machinery and MFA is made on the basis of valuation of assets created at factory site and after submission of bills, payment receipts etc.

The bills and payment receipts for petty items valued upto Rs. 250/- for each item subject to maximum of 5% of the cost of Plant & machinery are not insisted upon.

Individual bills and payment receipts for expenditure incurred on erection and installation of plant & machinery, electrification and misc. items like tools, jigs etc. are not required but a statement of expenditure showing itemwise details in this regard duly certified by a C.A. to the extent of provision made in approved scheme are required to be submitted by the loanee.

Cash payment exceeding Rs. 20,000/- against single bill/invoice except statutory payment to Govt. Agencies, RIICO, RFC, RSEB, Commercial Banks etc. is disallowed for the purpose of disbursement of loan.

In case of company, disbursement of loan exceeding 50% or second disbursement is made only after the company submits copy of returns under section 125 of the Companies Act alongwith copy of receipts of filing fee deposited with concerned Registrar of Companies.

In case of imported Plant & machinery, the Corporation may provide Letter of Comfort to designated bank for opening LC on the request of the loanee unit.

The Corporation may provide letter of assurance to the approved supplier of Plant & machinery on the request of party for making payment of earmarked amount against machines to be supplied by the supplier.

In case of change in supplier of Plant & machinery, Corporation may consider approval of change in supplier/specifications of plant & machinery if changes are made for genuine reasons.

Corporation may also consider necessary excess saving adjustment against building, plant & machinery, MFA.

Disbursement of loan is also made for retiring bank documents against despatch of Plant & machinery from the approved manufacturer/supplier on submission of bank intimation, copy of invoices, transport receipts, transit insurance and after verification of goods at transporter�s site.


Procedure for quick disbursement

1.  Disbursement in all company cases or other than company cases where party has offered minimum 50% collateral security of the sanctioned loan,      Corporation may release three advance instalments of disbursement but each such instalment would not be more than 25% of sanctioned loan          amount.� First instalment is released on the basis of CA Certificate provided the unit has raised its entire paid-up share capital and unsecured          loan envisaged in the approved scheme and complied the requisite terms and conditions of sanction letter and submitted an undertaking that                  investment on land, building, plant & machinery has been made in accordance with approved project. The subsequent advance instalment is               made only after watching proper utilization of earlier advanced instalment of loan.

2.  Disbursement of loan may be made on the basis of proforma invoice in respect of plant & machinery supplied by the reputed supplier specifically     approved by the Corporation.

3. Disbursement of loan in case of existing marble units going for expansion of project,  to the maximum extent of 50% of sanctioned       loan against plant & machinery may be made in advance after compliance of certain formalities/norms

Whom to approach for valuation 

For carrying out valuation of the assets, approach be made to Branch Manager.

 

REPAYMENTS

When Interest Falls Due 

Interest at the prescribed rates falls due on the first day of every quarter i.e. Ist day of March, June, September and December. Please make sure that interest is paid on the due dates so that you are absolved of the liability to pay the penal rate of interest.

When Instalment of Principal Falls Due 

The Principal is also recovered in quarterly Instalments. The first quarterly Instalment falls due from 6 to 24 months after the expected date of production as envisaged at the time of appraisal in each individual case.

Where to Repay 

For all Loans, repayments are to be made at the concerned Branch or Sub-Office of the Corporation. The repayment should be made by Cheque/Demand Draft in favour of Rajasthan Financial Corporation. Please note that RFC has not authorised any agent or agency to collect the dues on its behalf. However, the officials of the Corporation are authorised to collect Cheques/DD in person. 

Rebate on Timely Repayments 
Rebate is admissible on timely payments made on or before due date. Rebate in penal interest is also given if the payment is made within the same quarter in which it falls due for payment. 

Reminder for Payment of Interest Due and Instalments 
Though we try and remind you of the payments falling due in advance but non-receipt or non-information about it is no excuse. In case of default, the entrepreneur is liable to be charged penal interest at the rate prescribed over and above the effective rate on the defaulted amount for the period of default. Entrepreneurs are advised to remain in touch with the concerned Branch Office to know their repayment liabilities on the due dates. 

Consequences of Non-Payment 

Non-payment of the due, attracts penal interest. If the defaults become chronic and the Corporation feel that the borrowers are avoiding the payments knowingly and wilfully or the management of the concern is unable to run the unit on economic lines, RFC will be constrained to take the painful decision of acquiring assets under Section 29 of SFCs Act, 1951 and dispose them off by auction/sale to recover the outstanding dues. We do not relish taking such drastic action unless the circumstances compel us to do so. If by sale of assets there is any loss to the RFC (on account of the sale price of assets disposed off by the Corporation being insufficient to cover the total outstanding). We are left with no alternative but to go in for legal proceedings to recover the balance amount from promoters/guarantors personally.

Facility of Postponement, Reschedulement etc. 

However, if for genuine reasons beyond borrower's control, borrowers fail to repay the dues of RFC in time, they should approach the concerned Branch Office well before the due date of instalment and furnish full details. Depending upon the merits of the case, facilities of postponement, reschedulement etc. may be considered. However, grant of such facilities is solely at the discretion of the Corporation. It is also necessary that borrowers should remain in regular touch and continue to keep the Branch Office informed of the progress and working of the unit at regular intervals. 

Revival of Closed Units 

For revival of potentially viable but closed units, facilities like reschedulement, funding of intt., Waiver of penal interest, change in partners & Directors and recommendation to Banks and other Govt. Departments can be considered for which request may be given to Branch Office. 

Second Charge 

During the course of implementation of the project or after the unit commences the production, sometimes your bankers may like to have second charge on the assets on which RFC is having the first charge for providing working capital finance. Application for this should be made in the prescribed form (which can be obtained from the Branch Office). Generally such request is always agreed, if it is going to help you. 

Change in Constitution/Directors/Partners etc. 

Our usual terms and conditions for grant of loan require that the constitution of the concern/company should not be changed. If change in constitution becomes necessary in the interest of the project, a written request should be made to the concerned Branch and change be effected only after the approval has been granted. 

General Problems 

Our Branches are Focal Points for all your problems. The Branch Incharge should therefore be contacted not only for sorting out your problems, but also for exchange of suggestions for the improvement of our/your working and procedures. However, if necessary, please feel free to contact the Deputy General Managers (Operations), General Managers and Executive Director in the Head Office. The Chairman & Managing Director too would be glad to meet you. 

Food and Food products
Textiles
Printing Paper and Wood Products
Chemicals & Pharmaceuticals
Mines and Mineral Products
Metal Products
Others

PRODUCT

POLICY

Food and Food products

 

Ice Factory

Application should not be accepted for setting up ice factory for less than 10 TPD.

Cold Storage

Applications for setting up cold storage of above 2000 MT capacity may be accepted and processed if sufficient scope is found in the area.

Dairy Sector

Project fulfilling the norms of Milk and milk products order,1992 regarding installed capacity of proposed Dairy unit for handling Milk and Milk products only be considered for finance. (Extract of relevant guidelines are given below)
Registration: 
1.     On and from the date of commencement of this order no person shall manufacture or carry on business in milk or any milk products nor create any manufacturing facility for the business, unless such person has made an application in the form specified in the first schedule alongwith the prescribed fee to the registering authority for obtaining the registration certificate.
2.     The provisions contained in sub-paragraph (I) shall apply to such person who handles or is equipped to handle or who has in the establishment or unit under his ownership or control (or where he has more than one such establishment , all the establishment put together) installed capacity for handling milk in excess of ten thousand litres per day, or milk product containign milk solids in excess of five hundred tonnes per annum. 
3.      Promoters contribution would not be less than 40% of the project cost.
4.      Collateral security of immovable property having MRV not less than term loan would be furnished.
The relaxation in collateral security (not below 50% of the loan amount) be considered by the CMD.
Relaxation in the norms of collateral security, if any requested be referred to HO only if the BM/DGM(Br.) (sanctioning authority as the case may be) is satisfied about viability of the project and security of loan giving full justification for further consideration of the PCC/CMD.

Distilleries

i) No new distilleries may be permitted in Alwar & Jaipur districts.

ii)All distilleries will be asked to ensure recycling of treated effluents.

iii)No commitment by RIICO or any other agencies may be made by way of land or loan on any distilleries/ Breweries without prior approval of the committee of Secretaries and the Govt.

Textiles

 

Textile printing

Loan applications may be accepted only if these are supported by NOC from Water Pollution Control Board.

Niwar Manufacturing Units

No more applications for setting up Niwar Manufacturing units in Bhilwara District will be entertained.

Spinning of Yarn

a)Financial assistance can be considered on a very selective basis to new spinning units basically rotors. Such proposals should satisfy the usual norms of viability and should be based on Debt Equity Ratio 1.5:1. Adequate availability of waste cotton for such units has also to be ensured.

b)Expansion proposals from existing cotton spinning units may be considered for enabling them to reach upto 25,000 spindles and achieve better viability in their operations provided the proposals satisfy Debt Equity Ratio 1.5:1.

c)Financial assistance to new units for spinning of shoddy yarn/ woolen yarn based on worsted system can be considered.

Zero Zero Felt

Application may be accepted subject to NOC from RPCB
on Zero Zero Felt with composite unit.

Ready-made Garments

A cautious approach be adopted for scrutiny of the promoter in financing the ready-made garments industry in the State. The capability and bonafides of the applicant should be carefully examined during the course of appraisal of the project. In case the unit is set up in rented premises, collateral security as per norms prescribed should be insisted upon and no relaxation should be allowed.

Process Houses

Financial assistance for textile process houses at Bhilwara
only shall be considered on the stringent norms as under:
i)   Higher promoter's ratio 1:1;
ii) Adequate security including collateral may be ensured.
iii)Project should be promoted by well experienced promoters.
This guideline shall not be applicable for cases covered under RTUF scheme.

Printing Paper and Wood Products

 

Printing Press

I) Application for setting up new and improved technology of printing press like DTP system, offset printing etc. may only be entertained in Jaipur, Jodhpur, Kota,Udaipur, Bikaner, Alwar etc.
II) Only latest technology Printing Machine should be considered on selective basis to the experienced promoters having sound financial means with following terms:

  1. Security Margin: 50%
  2. Promoter's contribution: 50%
  3. Collateral security: Equal to loan amount.

All  the loans in this sector shall be sanctioned at HO till the recovery position improves substantially.

Colour Lab

May be financed after ascertaining adequate scope and 100% collateral security is furnished.

Chemicals & Pharmaceuticals

 

Pesticide Formulation

No application for setting up pesticides manufacturing should be entertained unless NOC from Director of Agriculture, Government of Rajasthan is produced. While financing such projects adequate collateral security should be obtained.

Non Power Operated Acid 
Detergent

Such units will be assisted only when group of entrepreneurs opt on composite basis and approach corporation for assistance.

Pharmaceutical units

i) Restrictive financing considering 40% security margin and on the condition that the unit is not being set up in rented premises.

ii Clearance from Directorate of Medical and Health (Drug Control Organisation) is required before disbursement of last 20% of the sanctioned loan.

iii Guidelines of pharmaceutical units may also be applied for Homeopathic and Ayurvedic Medicines.

iv While financing such projects adequate Collaeral security should also be obtained.

Mines and Mineral Products

 

Tractor Compressor

a)A cautious approach be adopted for further financing of tractor compressor units at Bhilwara, Udaipur and Sirohi in particular and at other places in general.

b) Preference should be given to those who either have base units of their own or have mining lease of sufficient size ( say 6,000 sq. mtrs.) in their name.

c) Collateral security of mortgageable and marketable immovable property having value not less than the loan amount be taken in each case in addition to hypothecation of tractor compressor financed by RFC.

Refractories

Application may be accepted for financial assistance to the specialised type of sophisticated refractory units manufacturing high alumina bricks, silica bricks with high conduction carbon refractories, zircon & ceramic fibre products. However, further financing will be considered on selective basis with adequate collateral security and that too conforming ISI specification , sound entrepreneurship and investible capabilities.

Marble cutting

The minimum promoter's contribution shall be 33% of the project cost and the debt equity ratio should not exceed to 2:1. Marble Mines would not be condition for establishing a marble processing unit but possessing of a mine of adequate marble reserves of good quality would be considered to be positive aspects for the project.

Hydrated lime and quick lime

i) Loan for hydrated lime units may be considered normally within 50/60 Kms. radius where sufficient raw material deposits of requisite grade are available.

ii) No application is to be accepted in Udaipur Region.

iii) While financing such project adequate collateral security should also be ensured and it should also be ensured that good quality of raw material is available in plenty.

Mineral Grinding

i)No application for financial assistance for setting up of mineral grinding units (marble chips and powder) in Alwar district be accepted unless backed by 100%
Mo rtgageable and marketable collateral security on merit of the case.

Granite Slabs

a) Granite units for manufacturing of slabs (2'X8' & above) based on Kerosene (excluding slabs manufactured by gangsaw) may be considered for financial assistance on merits with 100% collateral security.
b) Financial assistance for the existing running units in the industrial areas may be considred for installation of granite cutter (water based) having size 2 x 8 and above, subject to the condition that mortgageable and marketable collateral security of immovable properties at-least equal to the cost of P&M shall be furnished. 
c) Financial assistance for the new units coming up in the industrial areas may be considered for installation of granite cutter (water bases) having size 2 x 8 and above, on the following terms & conditions:
i) The promoters are having experience in the line and must have sound financial background. 
ii) In addition to the primary security, the concern shall furnish mortgageable and marketable collateral security of immovable properties of not less than the term loan amount on P&M.

Metal Products

Auto leaf springs

In view of substantial number of units already financed by the Corporation, no application for auto leaf spring units may be accepted.

Application from such units who are having satisfactory marketing tie up or who have been granted ancillary status by leading vehicle manufacturing units may continue to be accepted. Before registering such application prior reference to be made to HO. However, while financing such project 100% collateral security should be obtained and proper scope should also be ascertained.

SS rolling Mill

The minimum promoter's contribution shall not be less than 50% of the project cost. In case promoter is not in a position to bring the required contribution then the collateral security equal to the value of double the amount of short fall in the promoters contribution shall be insisted upon. However, in no case the PC shall be less than the 40% of the project cost. For relaxation in the above norms, if any, in a particular case,the same would be forwarded by the concerned branch to HO for consideration forwarding the full details of the case giving reasons and justification in support of his recommendations for the relaxation required in a particular case. For existing units, the cases would be examined/appraised subject to the norms followed under Normal Term Loan scheme.

Industrial Fasteners

The loan application may be considered for financing outside residential area and not in rented premises.

Recovery of Zinc From 
Zinc Ash unit

Application for extending financial assistance for recovery of zinc from zinc ash and brass ash units may be accepted provided, promoters have sufficient experience in the line. They have firm arrangements for continuous technology consultancy and assurance for non interrupted supply of power and raw material.

Grinding media

Application only from the units which propose to go in for product mix particularly with forged automobile and engineering components along with grinding media with adequate collateral security may be considered.

Metallic yarn

Application for setting up Metallic yarn units are not to be accepted except at Khandela, Distt. Sikar from entrepreneur who are established in Metallic Yarn trade but adequate collateral security is to be obtained.

The Plant and equipments including VCR, Deck,CTV and Recording Deck

The application for financial assistance to such units accepted at branch shall be forwarded to HO for further processing.

Others

 

Drilling bits

Applicant desiring of setting up this type of industry shall be offered existing sick/ closed units available for sale with the Corporation.

Transformer units

No new application for manufacturing and repair of transformer is to be registered for Jaipur and Dausa Districts unless backed up 100% collateral security subject tono restriction of the state government.

Guar Gum

A) The Corporation will adopt a cautious approach for financing the guar gum projects.

B)In case of split unit: 
For new units: Minimum promoter's contribution may be kept at 40% and minimum 50% collateral security will be required.
For relaxation in the above norms, if any, in a particular case, the same would be forwarded by the concerned branch to the HO for consideration, forwarding the full details of the case giving reasons and justification in support of his recommendations for the relaxation required in a particular case.
For existing units:
The cases would be examined/ appraised subject to the norms followed under Normal Term loan Scheme.

C)In case of powder manufacturing units: In the case of powder manufacturing units the decision should be taken at HO level as per the existing guidelines.

Brick Kilns

No new application for setting up Brick Kilns having moving chimneys will be entertained. Applications for Brick Kilns having pollution control systems and fixed chimneys along with NOC/ consent from RPCB only may be accepted having adequate collateral security.

Plastic Processing Units

(i) The unit promoted by experienced persons in the line with sound financial base shall be considered only in the potential areas like Jaipur, Udaipur, Jodhpur, Kota and Alwar Districts.
(ii) The projects having cost estimate of Rs. 50 Lacs and above based on latest technology plastic processing machines with higher standard of automations and performance shall be considered. 
(iii) However, proposal of expansion/ modernisation of existing units shall be considered irrespective of project cost, on their merits. OR
If marketing scope is found at a particular place and the promoter is prepared to provide 100% collateral security for term loan on fixed assests and 150% for WCTL (in case the loan is applied under SWS), such projects may also be financed within the sanctioning powers of Branch Office.

Dall & Oil Mill

i) The promoter contribution shall not be less than 60% of the project cost. 
ii) Collateral security equivalent to term loan amount for fixed assets and 150% of the WCTL, if any, considered shall be furnished.

Hotels & Restaurants

FOR HOTELS :
i) Financial assistance may be considered upto a term loan of Rs. 25.00 lacs subject to the condition that minimum marketable and mortgageable collateral security of 25% of the loan amount shall be obtained. 
ii) The location of the hotel should be at marketable place.
iii) For the loan amount exceeding Rs. 25.00 lacs, the Corporaiton may continue to finance as per existing norms but only to financially sound entrepreneurs (sound net-worth) having relevant background and experience. 
iv) To control unplanned expansion of Hotel in the vicinity of Ranthambore National Park,Sariska Tiger Reserve and Keoladeo National Park, Bharatpur, the Forest Department, Govt. of Rajasthan vide UO Note No. F.3(9) Forest / 2005 dated : 5-4-2005 has ordered that steps to be taken so that no new hotel come up in the vicinity of Ranthambore National Park, Sariska Tiger Reserve and Keoladeo National Park, Bharatpur till further orders.

FOR RESTAURANT :
i) No financing in rented premises shall be considered 
ii) Financing upto a term loan of Rs. 15.00 lacs may be considered as per existing norms with the condition that marketable and mortgageable collateral security of atleast 25% of the loan amount shall be furnished
ii) For the loan amount exceeding Rs. 15.00 lacs, the Corporation may continue to finance as per existing norms with need based marketable and mortgageable collateral security.



Note: The above policies are framed from time to time and are subject to review and change at any time by the Corporation at its sole discretion without any notes. The above guidelines will be applicable on new units and would not be applicable in general on cases of existing units going for expansion unless it is specifically provided in the guidelines itself as to its applicability on expansion cases as well. These guidelines would not be applicable on the good borrower and to the unit promoted by existing borrowers looking satisfactory payment behaviour with the Corporation.