Tourism has emerged as one of the world’s most important activities.
-
-
These factors would definitely help us to determine the opportunities of investment in Tourism Sector. Besides, the National Action Plan for Tourism envisages integrated development of a few select Tourism Centers, one of which is in Kerala – Bekal Beach.
-
State Bank of India has several related schemes for its customers. These include traveler’s cheques, the State Bank Card and a loan scheme called Travel Cash. As the bank was appointed Official Banker for India Tourism Year, it promoted its travel schemes to promote tourism.
STATE BANK CARDS:
The Bank has introduced for convenience two State Bank Cards: Regular and Hi-value. Their instant acceptance is proof of more than just the power of plastic; they are a testimony to the faith of over 80,000 cardholders.
TRAVELLERS CHEQUES :
These have gained popularity over the years and are accepted at over 30,000 outlets.
TRAVEL CASH:
The travel cash scheme provides an opportunity for families and individuals to holiday anywhere in India. The loan is repayable in easy installments.
The STATE BANK OF INDIA proposes to focus on investments in tourism in Kerala on the following aspects. If the projects are found viable:
 To encourage the private sector with financial support for construction of hotels with rooms at a lower price to cater to
the targeted tourist inflows.
- To finance development of heritage properties for raising the level and capacity of accommodation.
- With vast area under back-water financing to promote houseboats.
- Financing tourist-taxi operations.
- Financing shopping complexes with an accent on trade.
- Encouraging Indian companies in construction of hotels with three, four or five star category as this would help them
to issue shares/ debentures to NRI’s with repatriation benefits to the extent of 40% of the new issue.
INDUSTRIAL SECTOR
Working Capital Finance
SBI offers working capital finance to meet the entire range of short-term fund requirements that arise within a corporate’s day-to-day operational cycle.
The SBI working capital loans can help your company in financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and carrying current assets.
SBI’s working finance products comprise a spectrum of funded and non-funded facilities ranging from cash credit to structured loans, to meet the different demands from all segments of industry, trade and the services sector. Funded facilities include cash credit, demand loan and bill discounting. Demand loans are considered also under the FCNR (B) scheme. Non-funded instruments comprise letters of credit (inland and overseas) as well as bank guarantees (performance and financial) to cover advance payments, bid bonds etc.
FAQs
How is working capital finance typically structured at SBI?
At SBI, working capital loans are tailored to suit the precise requirements of the client, in any of the various instruments available or structured as a combination of cash credit, demand loan, bill financing and non-funded facilities.
The bank’s accomplished credit crew can gauge the credit needs of each client and frame the exact solutions.
How does SBI approve working capital loans?
SBI’s dedicated credit team has a deep understanding of the intricacies of various industries and is richly experienced in reckoning the business potential of companies.
These informed professionals can assess your specific credit requirements and tailor customized financial solutions to suit your risk profile and the working capital cycle of your company.
What are the tenors for which SBI extends working capital finance?
Normally working capital finance is extended as a ‘limit’ for various facilities for tenors up to one year. ‘Ad hoc’ requirements are also considered. How are SBI working capital loans priced?
The loans normally carry on a floating interest rate linked to SBAR, the SBI prime lending rate for working capital finance. Certain self-liquidating short-term loans are also linked to the bank’s Short Term Advance Rate (SBSTAR).
What is the repayment schedule like?
Working capital finance limits are normally valid for one year and repayable on demand. Specific, self-liquidating loans are linked to the natural tenor of the transaction (bill finance, export credit etc.).
Project Finance
The SBI has formed a dedicated Project Finance Strategic Business Unit to assess credit proposals from and extend term loans for large industrial and infrastructure projects. Apart from this, project term loans for medium sized projects and smaller clients are delivered through the CAG and the NBG.
In general, project finance covers greenfield industrial projects, capacity expansion at existing manufacturing units, construction ventures or other infrastructure projects. Capital intensive business expansion and diversification as well as replacement of equipment may be financed through the project term loans.
Project finance is quite often channeled through special purpose vehicles and arranged against the future cash streams to emerge from the project.
The loans are approved on the basis of strong in-house appraisal of the cost and viability of the ventures as well as the credit standing of promoters.
FAQs
What are the interest rate options on SBI project term loans?
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 medium term prime lending rate (MTLR), the lowest in the industry.
What additional facilities are there on these loans to optimize credit cost?
SBI project finance can be structured as either foreign currency or rupee loans with option of conversion from one type to the other at the end of interest periods. This will help you take advantage of forex fluctuations and global interest rate trends vis-à-vis domestic rates to minimize your debt cost.
What are project term loan tenors like?
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.
How is the repayment scheduled?
Repayment options are again structured in tune with the specific requirements of each project and its promoter. Repayments can be periodic or bullet, or may come with an initial moratorium during part of the project gestation period. For example, a seven-year loan may have a moratorium on repayments during the first two years and the payment installments may be spaced out during the remaining five years.
What is the SBI deferred payment guarantee?
SBI can extend deferred payment guarantees to industrial projects for obtaining imported equipment. The DPG is a standby credit guaranteeing deferred payments, usually for payments for capital goods, turnkey contracts etc.
Deferred Payment Gaurantees
Corporate Term Loans
The SBI corporate term loans can support your company in funding ongoing business expansion, repaying high cost debt, technology upgradation, R&D expenditure, leveraging specific cash streams that accrue into your company, implementing early retirement schemes and supplementing working capital.
Corporate term loans can be structured under the FCNR (B) scheme as well, with the option of switching the currency denomination at the end of interest periods. This will help you take advantage of global interest rate trends vis-à-vis domestic rates to minimize your debt cost.
The bank’s corporate term loans are generally available for tenors from three to five years, synchronized with your specific needs.
SBI corporate term loans may carry fixed or floating rates, as befits the exact requirement of the client and the risk context. Again, these rates will be linked to the bank’s prime lending rate.
SBI corporate term loans can have a bullet or periodic repayment schedule, as required by the client. The repayment mode may be linked to the cash accruals of the company.
The Bank’s expert credit crew gauges the applicant’s particular fund requirements and evaluates the company’s credit worthiness, factoring in the cash flows generated by it.
Structured Finance
SBI structured finance involves assembling unique credit configurations to meet the complex fund requirements of large industrial and infrastructure projects. Structured finance can be a combination of funded and non-funded facilities as well as other credit enhancement tools, lease contracts for instance, to fit the multi-layer financial requirements of large and long-gestation projects.
What is the SBI advantage in structured finance?
Being India’s largest bank and with the rich experience that it brings with it, SBI commands formidable expertise in engineering financial packages that address complex requirements with minimum risk.
Further, SBI has firm relationships across the financial map of the world, which can be leveraged to structure solutions that may necessitate the participation of several credit agencies.
Channel Financing
Channel financing is an innovative finance mechanism by which the bank meets the various fund necessities along your supply chain at the supplier’s end itself, thus helping you sustain a seamless business flow along the arteries of the enterprise.
Channel finance ensures the immediate realization of sales proceeds for the SBI client’s supplier, making it practically a cash sale. On the other hand, the corporate gets credit for a duration equaling the tenor of the loan, enabling smoother liquidity management.
SBI has the world’s largest banking network of over 9,000 branches and this enables it to deliver the financial solution at your suppliers’ doorsteps, across the span of the country.
TRADE & SERVICE SECTOR
Name of scheme
Transport Plus
Purpose
To finance new trucks/tankers/trailers/tippers/luxury buses including take over of existing similar loans from other banks/institutions.
Eligibility
Profit making Corporates/Non-corporates (surface transport operators) owning more than 10 well-maintained vehicles (including the proposed).
Quantum of finance
Minimum Rs. 10 lacs and maximum Rs. 10 crores.
Repayment
Term Loan: Maximum 5 years. Repayment will be in Equated Monthly Installments (EMI), starting two months after disbursement. Cash Credit: Repayable on demand, renewal every year.
Margin
20%
Eligible amount of finance
Term Loan: 100 % of the cost of the chassis, inclusive of excise duty. Other expenses are to be borne by the borrower. Where body building is not required, 80 % of the cost of the vehicle will be financed. An additional Term Loan limit, subject to a maximum of 20% of the original limit may be sanctioned for repair of the vehicle, on or after the 3rd year if the loan account is regular.
Cash Credit: 80% of receivables.
Prepayment
Term Loan: Maximum 1% p.a. on the pre-paid amount, for the residual period.
Rate of Interest
For Term loans, 8.50% p.a. with monthly rests and for Cash Credit, 11.75% p.a. with monthly rests.
Security
Primary: Hypothecation of vehicles financed as well as book debts.Collateral : i) At least 50% of the loan amount ii) Personal guarantee of promoters and two third-party guarantors.
Insurance
As per Banks guidelines.
Applicability
Metro/urban/semi-urban centers
Bill Finance
The bank’s bill finance product helps you bridge the fund gap between the date of sale of products to the receipt of payments.
The bank purchases the bill of exchange your company receives against a product sale, at a discount, thus doing away with the delay in realizing the receivables.
The extent of discounting would amount to the interest calculated till the payments for the original sale are realized, and will be determined on the basis of market interest rates as well as the credit rating of the borrower.
Cash Credit for Traders
SBI cash credit can be in the form of a running account, similar to an overdraft secured by a charge on current assets, that meets the frequent cash requirements of your trading cycle.
Term Loan for Asset Aquisition
The specialized product has been designed to help you purchase plant, machinery, land or other physical assets required during the growth and expansion of the your company.
Letters of Credit
The SBI offers Letters of Credit to facilitates your purchases of goods in trading operations, both domestic and international. Backed by the SBI’s strong reputation, you will be able to build better trust in trade and forge business relationships faster.
The bank’s vast network of branches and correspondent banks enables your enterprise to sustain a seamless flow of business on a wide platform.
Further, the bank’s informed trade finance crew can provide you with sophisticated credit and trade information and market knowledge, helping you extract more value from business.
Bank Gaurantees
The SBI guarantees the creditworthiness or the business capacity of its clients through its financial and performance guarantees
For more details, write to us |
