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Key Features of Indian Bank Project Loans
- Purpose and Usage: Designed to finance new projects, business expansion, modernization, or diversification of existing units. Can be used for acquiring fixed assets (e.g., machinery, equipment, workspace), meeting working capital needs, or funding infrastructure projects. Applicable for both manufacturing and service-oriented MSMEs, including specialized schemes for professionals (e.g., IND Professional Special) and sectors like healthcare (IND Health Care Scheme).
- Loan Amount:
Minimum and maximum loan amounts vary by scheme:
- IND SME Mortgage: Minimum of Rs. 10 lakh for new borrowers and Rs. 1 lakh for existing lenders, with higher limits based on project needs and eligibility.
- Corporate loans and larger project financing may have higher thresholds, depending on the project's scale and cash flow projections.
- Loan amounts are determined based on the project's feasibility, promoter's creditworthiness, and collateral offered.
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- Interest Rates: Competitive interest rates starting from 8.75% p.a. onwards for MSME and corporate loans, subject to the borrower's credit profile, project viability, and collateral. Rates may vary based on the loan scheme, tenure, and whether the loan is secured or unsecured.
- Repayment Tenure: Flexible repayment periods, typically up to 120 months (10 years) for schemes like IND SME Mortgage, allowing businesses to align repayments with project cash flows. For infrastructure or large-scale projects, longer tenures may be available, depending on the project's gestation period and revenue generation timeline.
- Collateral and Security: Most project loans are secured, requiring collateral such as fixed property (e.g., land, buildings) or project assets. For example: IND SME Mortgage requires fixed property in the lender's name as security. Some schemes may involve secondary collateral (e.g., personal guarantees or hypothecation of assets) or use the project itself as primary collateral. Digital initiatives like GST Sahay offer collateral-free, invoice-based financing for MSMEs, which could support smaller project components.
- Eligibility: Open to individuals, proprietary firms, partnerships, and companies engaged in MSME activities or larger corporate projects. Specific schemes target artisans (e.g., IND - PM Vishwakarma), professionals (e.g., Chartered Accountants, Architects), and healthcare units. Borrowers must have a current account with Indian Bank for certain schemes and demonstrate the ability to service the loan (e.g., through cash flow projections or existing business performance).
- Digital and Simplified Processing: Under Project WAVE (World of Advance Virtual Experience), Indian Bank emphasizes digitization, enabling faster loan processing through online platforms. Schemes like Online Shishu Mudra Loan and IND MSME DIGI use digital credit assessment models for quick approvals, ideal for smaller project loans. Loan applications can be submitted via the bank's website, mobile app, or internet banking, with minimal documentation for eligible borrowers.
- Specialized Schemes: IND Equipment & Wheels (CE/CV): Supports financing for commercial equipment or vehicles, which may be part of project infrastructure. Weaver MUDRA Scheme: Offers concessional credit up to Rs. 10 lakh for textile-related projects. IND Health Care Scheme: Targets hospitals and healthcare facilities for project financing, covering equipment and infrastructure costs. IND - PM Vishwakarma: Aimed at traditional artisans and craftspeople for setting up or expanding small-scale projects.
- Risk-Sharing and Structured Financing: For large-scale projects, Indian Bank may use structured financing techniques, such as Special Purpose Vehicles (SPVs), to manage risks and involve multiple lenders or investors. Project financing often relies on the project's future cash flows for repayment, reducing the burden on the borrower's balance sheet.
- Government-Backed Schemes: Loans under schemes like Pradhan Mantri Mudra Yojana (PMMY), PMEGP (Prime Minister's Employment Generation Programme), or Standup India are supported, with project reports generated through platforms like Finline accepted by Indian Bank. These schemes may offer subsidies or concessional terms for specific project types, particularly for MSMEs and startups.
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- Flexible Repayment Tenure: Extended repayment periods, up to 120 months (10 years) for schemes like IND SME Mortgage, allow businesses to align repayments with project cash flows.
- Digital and Streamlined Processing: Initiatives like Project WAVE enable faster loan approvals through digital platforms, reducing paperwork and processing time.
- Collateral Flexibility: Secured loans (e.g., IND SME Mortgage) accept fixed assets like property or project assets as collateral, making it easier for businesses to qualify.
- Support for Diverse Borrowers: Available to a wide range of applicants, including individuals, MSMEs, artisans (IND – PM Vishwakarma), professionals (IND Professional Special), and corporates.
- Risk Mitigation through Structured Financing: For large projects, Indian Bank may use structured financing (e.g., Special Purpose Vehicles) to share risks with other lenders or investors.
- Access to Government Subsidies and Incentives: Loans under schemes like PMEGP or Weaver MUDRA may qualify for subsidies or interest subventions, lowering the effective cost of borrowing.
- Boost to Business Sustainability: Enables businesses to invest in modern technology, equipment, or infrastructure, improving operational efficiency and competitiveness.
- Minimal Documentation for Eligible Schemes: Digital loan products (e.g., IND MSME DIGI) require minimal documentation, simplifying the application process for MSMEs and startups.
- Enhanced Accessibility: Loans can be applied for through multiple channels, including Indian Bank’s website, mobile app, internet banking. Nationwide branch network ensures accessibility for borrowers in urban and rural areas.
