A Hypothecation Loan is a type of secured loan where a borrower pledges movable assets (such as business inventory, raw materials, machinery, or vehicles) as collateral to the bank while retaining possession and ownership. Unlike a "pledge" where the bank physically holds the item, hypothecation allows the borrower to keep using the asset in their daily operations. The bank maintains a legal "charge" or claim over these items, giving them the right to seize and sell the assets only if the borrower defaults on the loan.
Key Features:
- All rates are subject to revision from time to time.
- No. term deposit including recurring deposit will be accepted exceeding period of 5 year.
- Premature Withdrawal Penalty : Savings Bank interest rate be given under 45 day there after penalty of 1%, less than the applicable rate.
Applicant details:
- Last three years balance sheet, copy of income tax return -last three years, copy of Partner personal return , Memorandum and Article of Association in case of limited company, resolution for loan application.
- Tax bill of Property
- 3 Photographs of Applicant
- Business proof of Applicant
- Applicants Pan card / Partners Pan Card / Limited Companys Pan card
- Bank account statement of last 2 years
- Stock statement of the business.
- Applicant has to show all original documents to the bank for verification with zerox copy. Original documents will be returned to applicant after verification.
Guarantor Details:
- Photograph-2 copies
- Last tax bill
- Last income tax return copy / Pay slip of last 3 Months.
- Address proof-electric bill /telephone bill (any one).
- Photo proof-Pan card / Voter card / Driving license/Aadhar card (Any one).
Conditions:
- The limit will be decided on the basis of turn over (sales) / projected sales i.e. 20% of turnover (sales) or projected sales against stock 30% margin of stock.
- Applicant has to provide collateral security to the tune of 70% of the limit by way registered mortgage declaration of residential premises, office, shop, godown, shed etc.
- Insurance of stock and mortgage property to be taken in favour of bank by the applicant.
- Original documents such as share certificate, Sale deed, Tax receipt allotment letter are required for registered mortgage of the property.
- Title clearance and valuation report will be done by approved lawyer and valuer of the bank. Applicant has to pay their fees.
- Applicant has to submit stock statement at the end of quarter and before 10th of the next quarter.
- The applicant has to provide two guarantors.
- Limit is subject to renewal after 12 months.
- Applicant has to take share @ 2.5% to 5.0% of the limit.
- Processing charges upto Rs. 1000/- will be levied on sanction.
