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.