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Target Group
Owners of the property who have let out the same to reputed companies/ shops for commercial purpose/ Industrial/ software companies, MNC’s, Bank, PSUs / Reputed Govt. / Semi-Govt Institutions / Organizations, Financial Institutions, Insurance Companies etc. for their occupation or and also providing services in the form of office infrastructure with/ without manpower etc (Plug & play model) and have future cash flows /receivables including lease rentals, service charges, Agency Commission assuring Minimum Guaranteed Amount etc. as per agreed terms.
Owner of the property who have rented out their premises to Allahabad Bank are also eligible.
Age of Building
Not more than 15 years
Purpose
Meeting business / personal needs but not for speculative purpose.
Quantum of Loan
Minimum: Rs.1.00 Lac
Maximum: Rs. 200.00 Crores or as per requirement of the applicant or limit arrived at, which ever is less but within prudential limit exposure of the Bank.
Assessment of Loan Amount
Loan amount will be assessed in such a way that it is repaid within the residual lease period or maximum 120 months, whichever is earlier. Net rent/ service charges receivable will be calculated after making necessary deduction from gross receivable for the following –
- TDS as applicable
- Advance rent or Security Deposit (If Payable on monthly basis, the same should deducted as per term of payment and if the same is payable after expiry of lease period, the monthly installments equal to the months for which security deposit/ advance rent was taken at the start of the lease will be reduced from the repayment period and the MPBF will be calculated accordingly)
- Lease rent payable if the land is allotted by statutory authorities.
- Annual Maintenance Charges in respect of Commercial Building (Annual maintenance charges should be ascertained on actual basis and if the same is not possible, reasonable deduction from Gross rent based on the age and condition of the building should be made)
- Municipal Taxes to the extent payable by the lessor.
- Service tax to the extent payable by the lessor.
From Net rent/ service charges receivable following deductions will be made to arrive at MPBF
- Margin @ 10% of Net rent/ service charges receivable for any upward revision of Interest and other exigencies.
- Gross Interest assumption @ present rate of interest for the tenure of the loan
(Gross receivable will be as per the lease agreement and if there is any in-built provision for increase, the same can be considered.)
Thus MPBF calculation will be as per following table –
Gross Rent / Service Charges receivable |
Less- TDS |
Less- Service Tax (if any) |
Less- Advance Rent/ Security Deposit (if any) |
Less – Annual Maintenance Charges |
Less- Other Taxes (Municipal Taxes etc.) |
Less-Other deductions, if any |
Net Rent / Service Charges receivable |
Less - 10% margin on net rent / Service Charges receivable |
Amount of Rent Available for servicing of Loan (A) |
Less-Gross Interest for the loan period (Assumption to be made at present rate of interest for entire loan period. In most of the cases the monthly installment is variable on account of increase of Rent. As such this amount can be arrived after making detailed calculation in OpenOffice.Org excel/ Microsoft Excel (B) |
MPBF: (NPV of A) (A-B) |
Click here for Rate of interest
Click here for Processing Fees, Prepayment Penalty, Documentation Charges, Mortgage and other charges
Repayment
In equated monthly instalments for a period not exceeding 120 months or unexpired period of lease/ agreement, whichever is earlier, from future cash flow / receivables including lease rentals, service charges, Agency Commission assuring Minimum Guaranteed Amount etc. as per agreed terms.
Repayment can also be done by Stepped up / variable EMIs in consonance of rent as per the escalation provision in lease agreement / agreement for a period not exceeding 120 months or unexpired period of lease/ agreement, whichever is less from future cash flow / receivables including lease rentals, service charges, Agency Commission assuring Minimum Guaranteed Amount etc. as per agreed terms.
Repayment will start from next month of the date of disbursement.
Security
Primary: - Assignment of Future cash flow/receivables including lease rentals, service charges. Agency Commission, Minimum Guaranteed Amount etc.
Collateral: - Equitable Mortgage/ Pari passu charge of relative immovable property having market value not less than 125 % of the proposed loanIf the equitable mortgage of relative immovable property is not possible, for any valid reason whatsoever, the mortgage of any other property as security with market value not less than 150% of the proposed loan be insisted.
Or
100% value of NSC/Bank's own deposit etc.
Or
125% cover partly by immovable relative property and partly by security such as NSCs, Bank's own deposit etc.
Open Land as a collateral security under this scheme will be accepted only for the following purpose on the condition that Land is not an agriculture land/ acquired on the basis of partition deed), Further, Land is identifiable, situated in residential/ commercial area and easily marketable only when
- Land is rented for factories, where temporary structure is created or
- In certain case, where it is not possible to mortgage relative property, for any valid reason whatsoever, another property in shape of land may also be accepted as security.
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