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 Corporate » Corporate Credit Departments |
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FAQ’S FROM MID & LARGE CORPORATE DEPARTMENTS
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| What is the difference between Processing charges and Upfront Fee? |
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Processing charges are collected for Fund based working capital limits and Non-Fund based working capital limits. The same has to be paid at the time of Fresh sanction / Renewal / Enhancement of limits. Normally, working capital limits will be sanctioned with a tenor of one year. Hence, processing charges will be levied once in a year i.e. at the time of Review / Renewal / Enhancement of limits. In case of Term loans Upfront fee will be collected and the same has to be paid only once i.e. before disbursement of the limit..
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| What is TEV study and when is it required? |
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TEV study stands for Techno-Economic Viability study and as per extant guidelines, in case of term loan proposals of Rs.10.00 crs & above for setting up of new projects being considered, appraisal from outside agencies may be obtained in case of necessity |
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| Whether Andhra Bank also does TEV study? |
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Yes, Andhra Bank also does TEV study. The same is handled by the Technical Appraisal Cell, under Corporate & Industrial Finance Department at Head Office.
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| What are the other functions of Technical Appraisal Cell (TAC) at Head Office? |
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Technical Appraisal Cell is a part of Corporate & Industrial Finance Department at Head Office. It is engaged in preparation of Information Memorandum for existing as well as new borrowers at a fee. The indicative fee charged at present is @ 0.25% of the term loan component plus service tax. However, the same depends on case to case basis.
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| What is the function of Project Syndication Cell? |
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The Project Syndication Cell is functioning under Large Corporate Department at Head Office. The Cell has been undertaking loan Syndication of Road Projects, Fertilizer plants, powers projects etc. The fee for syndication depends on case to case basis
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| What are the tenors for which Andhra Bank extends working capital finance? |
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Normally working capital finance is extended as a ‘limit’ for various facilities for tenors up to one year. ‘Ad hoc’ requirements are also considered for a period of three months with an additional interest of 2%
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| What are the interest rate options on project based term loans? |
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The bank offers term loans with both fixed and floating rate options, customized to the risk merits of the project as well as the promoter. Pricing is generally linked to the bank’s Base rate.
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| What are project term loan tenors like? |
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Project finance is typically structured as long term loans, with tenors generally from 5 to 10 years. Maturity periods and repayment modes are structured in line with the specific aspects of each project and industry, factoring in a timeframe for the venture to generate a stable revenue stream.
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| Is there any advance against Rent Receivables? |
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Yes. Advances against Rent Receivables are sanctioned to Individuals, Proprietorship, Partnership, Public Ltd Companies, Pvt Ltd Co as well as Trust s owning properties including Landlords of our branch premises. The eligible properties comprise residential/commercial properties with unencumbered, with clear and marketable title in favour of the owner.
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| What are the Benefits of booking forward contracts? |
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- Forward contract is a mechanism through which exchange rate is fixed in advance for purchase or sale of foreign currency at a future date.
- Forward contract is used for hedging the future risk arising out of exchange fluctuations in foreign currency transactions
- By booking a Forward Contract an exporter can determine the amount realizable on his export of goods in terms of home currency. Similarly, the importer can determine the cost of imports in terms of home currency
- Likewise, it helps the debtors/creditors to hedge their risk arising from exchange rate fluctuation (Like Foreign currency loans)
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