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| SME Financing » Pubali Prochesta |
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| Pubali Prochesta |
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| Introduction |
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The SMEs worldwide are recognized as engines of economic growth. The important role of SMEs in the national economy of Bangladesh for creating over 90 per cent of industrial enterprises, generating employment to 4 out of 5 industrial workers and contributing to over one-third of industrial value-added to gross domestic product (GDP) emphasizes its promotion by providing access to finance. The relative SMEs share in manufacturing value-added is much higher and estimated to vary between 45 to 50 per cent of totaling value-added generated by the manufacturing industries sector. With these perceived merits of SMEs, Bangladesh Bank has emphasized for their promotion especially in the area of access to finance and has given several directions to the scheduled Banks. For compliance to central bank’s instructions and prospects of SMEs in Bangladesh economy, Pubali Bank Limited introduced three products namely Pubali Subarna, Pubali Karmo Uddyog and Pubali Sujan. All these products are demand loan by nature. But we do not have any product for SMEs to ensure continuous finance for fulfilling the needs of working capital. Research and Development Division in consultation with the Creadit Division has designed a product named “Pubali Prochesta” to augment working capital base in SMEs for uninterrupted day to day operations. The features of the products are given below: |
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| For any query please Contact at: Tel: (PABX) 9551614 FAX: 880-2-9564009 or e-mail us at gsdd@pubalibankbd.com |
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| Product Object |
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Small and medium enterprise ('SME”) borrowers may need to ensure source of continuous finance for uninterrupted operation. Pubali Prochesta will help SMEs to augment working capital base to meet the day to day financial needs. |
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| Customer segment |
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Any SME entrepreneur |
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| Purpose |
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To meet any justifiable working capital need. |
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| Nationality |
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Bangladeshi |
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| Age limit |
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From 21 years up to 60 years (the borrower's age must not exceed 60 at the expiry of loan tenor) |
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| Minimum income |
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Minimum income must commensurate with the amount of loan applied for. |
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| Borrower's eligibility |
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| Loan size |
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Tk. 2 lac to Tk 10 lac for SE customers |
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Tk 5 lac to Tk 100 lac for ME customers (Collateral is a must) |
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| Security/Collateral |
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Registered mortgage of property/ownership of the space/possession right purchased in Bank's name; |
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Hypothecation of machineries, equipment, vehicles, inventories; |
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Lien of cash collateral (FDR) and other en-cashable financial instrument; |
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In case of proprietorship concern, PG of borrower and spouse; |
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In case of private ltd. co. or partnership company, PG of all the directors/partners and their spouses to be obtained; |
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Post dated replaceable cheque covering the tenor and limit of the loan; |
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Usual charge documents; |
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Others as applicable. |
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| Documentation |
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Valid trade license of the applicant; |
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Copy of at least 1 year old trade license; |
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Notarized partnership deed/registered by SRO (in case of partnership company); |
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Memorandum and Articles of Association in case of private limited co. |
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Passport/national ID/Photocopy of ward commissioner/UP chairman certificate of the proprietor/Partner; |
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Photo of the proprietor/partners/a/c signatory attested by the applicant and verified by relationship manager; |
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Last 12 months bank statement of concerned account; |
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Statement of all active bank loans; |
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Latest clean/UC/standard CIB report; |
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Net worth statement of all borrowers and guarantors. |
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| Insurance |
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Fire, flood and RSD insurance as applicable. |
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| Processing fee |
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1% but not exceeding Tk. 10,000.00 |
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| Interest/profit rate |
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11.75%p.a. However, the rate is subject to change based on the market conditions and policy of the Bank. |
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| Penal interest rate |
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1% above the regular interest rate to be applied on overdue amount. |
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| Interest calculation |
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Interest will be calculated on daily product basis for debit balance in the following manner.
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Accrual will be made on end of month. |
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| Interest application |
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Quarterly compounded. Interest will be charged in March, June, September and December each year. |
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Accounting Entries for Interest Capitalization at quarter end
Debit: Loan Account (customer)
Credit: Interest on Advance
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| Monthly Provision |
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Monthly Provision to be kept for Accrued Interest |
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Accounting Entries for Interest Accrual
Debit: Interest on Advance
Credit: Income Account (for unclassified accounts)
Credit: Interest Suspense Account (for classified accounts)
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| Stamp charges |
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All relevant stamp charges will be on borrower's account and will be debited from the account at the time of disbursement. |
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| Maximum tenor of the loan |
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One (1) year for continuous loan. |
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| Grace period |
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Not applicable. |
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| Repayment method |
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Accounts liabilities to be adjusted every quarter through regular deposits daily/monthly/quarterly but full and final adjustment shall be made within the validity period. |
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| Type of facility |
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CC(H), SOD |
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| Disbursement precondition |
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All the documentation formalities must be completed prior to disbursement. |
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| Debt-to-Equity ratio |
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Maximum 50:50 before disbursement. |
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| Deposit Procedure |
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Random by the depositor, no restriction for deposit |
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| Withdrawal Procedure |
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By cheques supplied by the bank |
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Debit by bank through voucher is allowed |
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| Withdrawal Frequency |
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Random by the Customers within the sanctioned limit |
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| Return of Cheques |
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To be recorded in Cheque Return Register |
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Charges recoverable for dishonour of cheque for insufficient fund. |
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| Balance Confirmation |
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Balance confirmation to be obtained from the account holders as at 31st December each year. |
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| Stopped Cheque |
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Stopped Cheque Register to be maintained |
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| Standing Instruction |
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Standing Instruction Register to be maintained |
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| Other Charges |
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Excise Duty, Incidental Charges, Service Charges are applicable |
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| Transfer of Account |
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Non transferable |
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| Duplicate Statement |
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Charge for issuance of duplicate statement |
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| Closing Charge |
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No closing charges to be realized |
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| Classification Status |
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Depending upon the time value after expiry of the Cash Credit limit |
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| Repayment method |
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There is no repayment schedule. Borrowers can payback the entire loan amount on or before expiry date. |
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| Renewal |
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The facility may be renewed and/or enhanced by the authority as merit basis |
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| Change of Interest Rate |
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Interest rate can be changed anytime during the tenor of loan |
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| Special Services |
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| The Special Services except general services that may be provided to the customer by the Bank, these include: |
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Loan Ledger Statements |
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Interest Calculation Sheet |
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Account Closure |
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| Verification |
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Contact point verification will be done as per prescribed format. It includes address of residence and office, telephone no and references. All verifications will be done to seek/verify/confirm the declared/undeclared information for proper identification of the applicant. |
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| Common restrictions |
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Stock report must be prepared/obtained and placed with loan application; |
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Credit risk grading (“CRG”) shall have to be at least “Acceptable” (CRG of at least 75) grade for ME customers; |
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From the date of the availing the facility the client has no operate his/her transaction through PBL account. At least 50% of the sales should be routed through the designated account in PBL. |
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.;l |
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| Foreign Currency Rates |
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| Currency |
Buying |
Selling |
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| USD |
115.50 |
116.00 |
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| EURO |
127.00 |
130.25 |
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| GBP |
146.50 |
151.00 |
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