Loan against warehouse receipt FAQs
Loan against warehouse receipt s
Can the Overdraft/ Cash Credit facility be used for any other purpose?
Disbursement at non-branch locations may be done through a demand draft payable at that location or through RTGS in the operative account.
How can the facility be renewed?
A request for renewal must be made. Renewal is based on maintenance of good track record.
How can repayment be made?
Repayment may be made by demand draft or by depositing funds in ICICI Bank's account.
How does the loan amount become 'overdue'?
The repayment of loan and interest must be made to the Bank before the end of the tenure for each tranche. Failure to do so would render the entire tranche of loan 'overdue'.
When does the Bank charge 'penal interest'?
Penal interest is charged if you fail to repay the loan plus interest by the end of the tenure of that tranche.
How is penal interest calculated?
The penal interest rate applicable is Applicable Rate of Interest Plus 6% Penal interest is charged on the total amount overdue i.e. on the principal amount plus interest.
What is line of credit?
Once a limit is set you may avail of the loan in multiple tranches capped to a maximum of the limit sanctioned. After repayment you may avail of fresh disbursement within the sanctioned limit and validity.
What documents are acceptable as proof of dealing in commodities?
It is mandatory to submit a declaration that you are dealing in commodities. In addition, any one of the following documents are acceptable:
Sales tax registration certificate
Certificate of registration with small-scale industries
Shop establishment certificate
TIN (Tax Payers Identification number)
Certificates/Letters provided by APMC to traders
The license to carry on the business as a dealer in the seeds issued by the registration authority of the dept. of agriculture
For what purposes may the Loan against warehouse be procured?
The funds may be used only for working capital requirement i.e. Agricultural operations, operational expense for next crop cycle, extending credit to farmers, etc. They may not be used for speculative purposes.
How long does it take for the loan against warehouse receipt to be sanctioned?
Loans are sanctioned usually within two business days of submission of the requisite documents.
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When are the commodities released?
The commodities are released only on realisation of funds. However, stocks up to a value of Rs. 2 million may be released by handing over a demand draft to the ICICI Bank official concerned.
How do I maintain a good track record for renewal?
By making payments regularly and honouring any margin calls.
How much does the processing fee amount to?
Non-refundable processing fee up to 2% (plus applicable service taxes) on the loan sanctioned by ICICI Bank.
What is OTC Funding?
OTC funding is over-the-counter funding and is offered by the Bank directly to you for stocking done in central/state warehouses or against stock in dematerialized form. Similarly, private warehouses are considered for financing to processors.
How may I avail of OTC finance?
You may do so by contacting our Relationship Executive (RE) or Area Sales Manager (ASM).
Are HUFs, trusts or partnership firms with HUF as partner eligible for RWRF?
HUFs are an eligible entity but trusts and partnership firms with HUF as partner are not eligible.
How is disbursement made at branch locations?
At the branch, disbursement may be made via account transfer if you have an account with ICICI Bank, RTGS or pay order.
When is the interest paid and how is it charged?
Interest is paid with the principal amount at the end of the tenure of each tranche. Interest is charged only for the number of days the loan is outstanding.
What are the margin requirements?
A margin of 25%-40% must be maintained depending on the commodity. If the price of a commodity falls, a margin call notice is issued.
How and when do I resolve the margin call?
A margin call must be resolved within 10 days from the issue of notice. A margin call may be resolved by depositing funds to bring the outstanding amount back to the stipulated margins.