Agro Industrial Co-operative Department

AIC Dept. provides direct finance to Co-Operative & Private processing units such as Sugar Factories, Spinning Mills, Oil Mills, Marketing Co-operative and other cooperative Industrial Units. AIC Department processes credit requests from sugar and other processing societies, weavers' societies, spinning mills besides other apex bodies like Marketing Federations, Maharashtra State Electricity Distribution Company, Food Corporation of India and Indian Farmers Fertilizers Co-operative Ltd., Maharashtra State Co-op. Tribal Development Corporation etc.

Both Term Loan as well as Working Capital loans are sanctioned. The term loans for period of 5 to 7 years are mainly provided for modernization & erection of sugar spinning & processing, Co- generation, Distilleries/ Ethanol, Solar energy & Green Filed projects as well

The Working Capital limits are given to meet the day to day requirements of the production units. These loans are disbursed through the Regional Offices Post disbursement monitoring surprise visits & stock verification by R.O. Manager & utilization of loan disbursed is carried by Regional Offices. Stock Audit is done by Govt. approved Chartered Accountants appointed by the Bank. Wherever, required prescribed stock statements, inspection reports are obtained for supervisory control purpose and ensure proper utilization of funds. Periodical review is submitted to Hon,ble Board of Directors.

The department also takes care of the loan documentation including obtaining of third party guarantees and creation of charge on the immovable assets as per the terms and conditions of sanction.

Bank is extending following types of loans based on nature of industry:

1. Medium Term Loan for erection / expansion of
   • Sugar unit
   • Distillery unit
   • Expansion & modernization
   • Co-generation unit
   • Solar unit
2. Working Capital
   • Pledge
   • 5% margin money scheme -2015-16
   • Hypothecation-Stores/Gunny bales.
   • Hypo.Distillery/ Ethanol / Chemical
3. S.T. loan for pre seasonal operations
4. Govt. Sponsored Schemes
   • (SEFASU / Soft Loan / RTL / / WCTL / RRTL
5. B.G. / L.C. (Non fund Limits)

• Pledge Loans

1	Limit	Maximum valuation of anticipated realistic peak level stocks likely to be reached by a factory during the relevant crushing period and as per valuation fixed by the Bank & the said valuation is fixed on the average price in preceding three months or current market price which ever is less
2	Period	1st November to 31st October – i-e- 11 Months
3	Margin	Stock of 1 year - 15% Stock between 1 to 2 year - 20% Stock between 2 to 3 year - 25% Stock above 3 years - 100%
4	Security	Sugar stock

• Hypothecation Loans

1	Limit	Against stores & spares (including gunny bags) – 120% of average maximum utilization of limits during preceding three years or 2 cr. whichever is less. For downstream divisions (distillery etc.) – Up to 110% of the limit utilized during previous season.
2	Margin	40%
3	Period	1st November to 31st October
4	Security	Hypothecation of Stock of store & spare, Gunny Bales, Distillery

• Short Term Loan

1	Purpose	To meet Pre-Seasonal and Advance for H & T expenses.
2	Limit	Limit is sanctioned considering the expected sugar production (Tagging Rs.200/- per quintal) & the gap shown in the cash flow.
3	Repayment Period	9 to 10 months (up to 30th June).
4	Security	Floating charge on movable & immovable Assets of SSK

• Medium Term

1	Purpose	Errection/ Expansion of Sugar unit, Distillery unit, Expansion & Modernization of sugar factory & Co-Generation units.
2	Limit for Co-operative Sugar unit	60% of project cost for Co-Generation & 50% for Modernization & Distillery
3	Limit for Private Sugar Unit	55% of Project cost for Co-Generation & 45% for Modernization & Distillery
4	Limit for Green field Project	45% of project cost for errection of sugar factory, Co-Generation & Distillery
5	Repayment Period	7 years (including 2 years moratorium)
6	Security	Mortgage of Assets (English Mortgage). Joint & Several Liabilities Bond of Promoters/ Directors.

• Sugar Valuation

As per guidelines of RBI dtd.01-07-1996, Bank finalizes the rate of sugar valuation & drawing rates. Monthly review is taken and rates are revised accordingly.

Daily sugar prices are taken from Sakhar Sangh. While arriving at the valuation /drawing rate following concept is adopted by the Bank.

1. • Last 3 months average rate or rate on the day of valuation whichever is less.
   • Drawing rate is arrive by reducing 15% margin from the valuation of sugar.
   • Rs.500/- per bag is tagged towards recovery of Bank loan.
   • Rs.250/- per bag is tagged towards H&T cost.
   • Remaining amount is made available to SSKs for cane payment.