Allahabad Bank announces special package for housing loan & MSME borrowers

In order to ease the difficulties being faced by the housing & MSME Sectors due to the current global conditions, Allahabad Bank, one of the leading nationalised banks of the country, has offered a bouquet of relief measures to new housing loan & MSME borrowers in line with the special package announced by Reserve Bank of India and Indian Banks’ Association.

HOUSING LOAN SCHEME :

The Bank has decided to reduce interest rates for fresh Housing Loans upto Rs. 20.00 lacs for a maximum tenure of 20 years to be availed from the Bank upto 30.06.2009 as under :

• The revised rate of interest per annum for sanctioned amount upto Rs.5.00 lacs for the tenure upto 20 years will now be 8.50% (fixed) with monthly rest
• For loans over Rs.5.00 lacs to Rs.20.00 lacs for the same tenure, the interest rate will be 9.25 % (fixed) with monthly rest.
• These rates of interest will be reset after 5 years from the date of drawal of the first instalment and the borrower will then have the option to choose either fixed rate or floating rate of interest.
• Existing margin reduced from 25 % to 10 % for loans upto Rs.5 lacs
• Existing margin reduced from 25% to 15% for loans over Rs. 5 lacs to Rs. 20 lacs.
• Waived the processing fee altogether on loans upto Rs. 20 lacs.
• Free Life Insurance Cover for the entire amount of outstanding loan
• Waived existing prepayment charges of 2 % of outstanding balance in case of takeover.

( The package , however, will not be applicable for take-over/renewal cases)

MEASURES FOR MSME CUSTOMERS

The Bank will implement the following measures:-

• Interest rates for all existing & new loans to Micro Industries will stand reduced by 100 basis points.
• Interest rates for Small & Medium Enterprises with fund based exposures upto Rs.10 crore will stand reduced by 50 basis points.
• Grant need based adhoc Working Capital Demand Loans upto 20% of the existing fund based limits in respect of units enjoying credit facility upto Rs. 10 crore.The loan will be repayable in one year with a provision of moratorium of six months during which only interest will have to be serviced.
• Sanction of need based increase in working capital limits keeping in view the elongated operating cycle.
• Relief will be granted by reducing margin on receivables.
• Receivables upto six months will be reckoned for book-debt financing.
• Need based relaxation on cash margins on letters of credit/guarantee.
• Extension of moratorium period in case of delayed implementation of project.
• Re-schedulement/Re-phasement of repayment for units unable to repay term loan obligation on time on case to case basis.

Apart from MSME Cell functioning at Head Office, the Bank has also set up Regional MSME Care Centres at Ludhiana, New Delhi, Kanpur, Kolkata, Ranchi & Bhopal to facilitate MSME Sectors for quick redressal of their grievances.

The above revisions of Interest Rates will be applicable with immediate effect.

The measures will bring welcome relief to the Housing Loan & MSME borrowers to stimulate the economy.

Publicity Department
19th December, 2008

Press Corner