The Important Points to be borne in mind while in Execution of Loan Documents
(The article gives the insight of important points to be borne in mind at the time of execution of loan documents with a to z check-list.) The system of obtaining proper documents as per sanction terms is called documentation. Without the proper documents, it is hard to create a legally enforceable charge for the security offered.…
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Pradhan Mantri Fasal Bima Yojana (PMFBY)
The Government of India recently approved the repealing of all earlier schemes under existing National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS). A new Insurance scheme called “Pradhan Mantri Fasal Bima Yojana (PMFBY) is put in place which replaces the old schemes from Kharif 2016. For all loanee farmers who borrow…
Read articleMeaning of ‘diversion of funds’ and ‘siphoning of funds’
The diversion of funds means utilization of funds by the borrower in deviation of sanction terms of the lender, including any of the following occurrences. The credit facility extended for the working capital purposes, used by the unit for long term purposes, which is not in conformity with the sanction terms. The unit deploys borrowed…
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Udyog Aadhaar replaces old system of MSME/SSI registration
Udyog Aadhaar registration is the new system that replaced the earlier system of SSI registration and EM-I/II. The gazette notification dated 18.09.2015 brought an end to the legacy of registration of SSI and Entrepreneur Memorandum (EM-I/II) as all other online/ offline systems of registration of MSMEs created and maintained by Central/State/UT Governments cease to register…
Read articleNon-Fund Based Facility to Non-constituent bank borrowers
The commercial banks in India were not allowed to extend non-fund based facilities to non-constituents borrowers of the banks in order to prevent frauds, diversion of funds etc. However, the above restriction imposed by RBI vide circular DBOD.Dir.BC.62/13.07.09/2002-03 dated January 24, 2003 created problems to the customers who do not enjoy fund based credit facilities…
What is the difference between Leasing finance and Hire-Purchase finance?
Leasing Finance: A lease is a contract between the owner (lessor) and the user (lessee). There are various types of lease viz. operating lease, finance lease, etc. In terms of lease agreement, the lessor pays money to the supplier who in turn delivers the article to the lessee. The lessee (hirer of the article) makes…
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