Required documents by bank against renewal of composite loan sanction
The process for the renewal of a composite loan sanction typically involves a series of steps and considerations. A composite loan usually combines multiple types of loans into a single facility, often offered by financial institutions to meet the diverse financial needs of businesses. Here's a general outline of the renewal process:
01.Assessment of Loan Terms:
Review the existing terms and conditions of the composite loan, including interest rates, repayment schedules, and any other relevant clauses. Understand the current state of the loan.
02.Documentation:
Gather all necessary documentation related to the loan. This may include financial statements, business plans, cash flow projections, and any other documents required by the lending institution.
03.Financial Health Check:
Assess the financial health of the business. Lenders will typically want to ensure that the business is in good standing and has the capacity to meet its financial obligations.
04.Communication with Lender:
Initiate communication with the lending institution. Discuss the possibility of renewing the composite loan and express your intention to continue the financial relationship.
05.Loan Renewal Proposal:
Prepare a comprehensive loan renewal proposal. This should include information about the business's current financial situation, future plans, and how the renewed loan will be used to support growth or address financial needs.
06.Negotiation:
Engage in negotiations with the lending institution. Be prepared to discuss and possibly negotiate terms such as interest rates, repayment periods, and any other conditions that may need adjustment.
07.Approval Process:
Submit the loan renewal proposal to the lending institution for review. The lender will assess the proposal and may conduct a thorough evaluation of the business's creditworthiness.
08.Legal and Regulatory Compliance:
Ensure that the renewal process complies with legal and regulatory requirements. Some loans may require specific approvals or documentation to be in compliance with local laws.
09.Finalization and Agreement:
Once the renewal terms are agreed upon, finalize the documentation and enter into a renewed loan agreement. Ensure that all parties involved understand and agree to the new terms.
10.Execution:
Execute the necessary legal and financial documents to formalize the renewal. This may involve signing a renewed loan agreement and any other relevant contracts.
It's crucial to maintain open communication with the lending institution throughout the renewal process. Additionally, be proactive in initiating the renewal process well before the existing loan term expires to allow for sufficient time for discussions and negotiations.
Here is some corresponding file document list against renewal of composite loan sanction....
SL NO. List of document
01.Loan application from client new loan
02.CIB (for new & renewal loan)
03.Bank statement client
04.Audited financial statement
05.Internal credit Risk
06.Board/EC memo
07.Updated Tin & Bin certificate
08.Trade license
09.Memorandum of association
10.Article of association
11.Schedule X.XII & XV (where applicable)
12.Customer visit report by bank
13.National ID card
14.Utility bill copy
15.Net worth statement
16.Income tax return
17.Association membership certificate (for export related client)
18.Factory license
19.Consent letter/ NOC (no objection certificate) from other bank (if any loan taken)
20.Sanction advise
21.Updated tax clearance certificate
22.Major security documents as per sanction
23.Latest compliance certificate
24.Latest valuation certificate
25.Khajana receipt
26.Updated NEC(National economics Parishad) copy