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Bill Discounting Scheme

THE SCHEME

The Scheme covers purchase / discounting of bills arising out of genuine trade transactions i.e. purchase of supplies made by small scale units to reputed Public Limited Companies / State and Central Govt. Departments / Undertakings.

SELLERS

Small Scale Units

i) State and Central Govt. Departments / Undertakings

ii) Public Limited Companies

GRANT OF PURCHASER-WISE LIMITS

Bills drawn by small-scale units for the supplies made by them and duly accepted by the Purchaser will be financed against security of Bank Guarantee in favour of NSIC.

Purchaser unit(s) may approach NSIC for sanction of annual limits by furnishing information as per the prescribed application form.

GRANT OF SELLER-WISE LIMITS

Seller unit(s) may provide bank guarantee in favour of NSIC for availing financial assistance under the scheme. Bills drawn by them against their supplies made, duly accepted by the purchaser will be financed. Annual limits can be fixed for such units by obtaining information as per the prescribed application form.

PERIOD OF USANCE OF BILLS TO BE CONSIDERED FOR DISCOUNTING :

The maximum usance period of such bills should not exceed 90 days. The period of unexpired usance of the bill shall not exceed 90 days while the tenure of the bills shall not exceed 120 days.

SECURITY:

Bank guarantees issued by banks approved by Head Office. The Bank Guarantee to be obtained should be equivalent to the value of assistance (including discounting charges & service charges for 90 days).

OR

Bill of Exchange duly accepted by large corporate units of good financial standing with a turnover exceeding Rs 200 Crores and net-worth exceeding Rs 50 crores and which are profit making for the last three years.

Personal guarantee of proprietor, partners of firms and Directors of the company shall also be obtained.

RATE OF INTEREST :

a) Assistance against the security of BG/SDR/FDR :

 Particulars Effective Rate of Interest (w.e.f 20/09/2011) (i)   Units having valid SE 1A rating under       NSIC’s  Rating Scheme 12.40% (ii)  Units having valid SE 2A rating under       NSIC’s  Rating Scheme 12.90% (iii) Units having valid SE 1B rating under       NSIC’s  Rating Scheme 12.90% (iv) Other Units 13.40%

The concessional  rate  of  interest  on  the  good  rated  units,  as  mentioned at Sl. nos. (i), (ii) and (iii) above shall be applicable only to those cases, where the units make timely repayments of the Corporation’s dues. The units which have not re-paid its dues within the stipulated 90 days, shall not be eligible for the concessional rate of interest.

The rate of interest on the delayed payment  shall be charged as:

The Additional rate of interest on delayed payment shall continue to be charged 3% over and above the normal rate of interest (i.e. 13.40%) for the delays beyond 90 days.

Revised rate of interest (normal as well as interest on delayed payment)  shall be made applicable on :

A) All the cases sanctioned and / or  disbursed on or after 20.09.2011.

B) Principal amount outstanding as on 20.09.2011, against the assistance already granted & disbursed.

SERVICE CHARGES

FOR UNITS PLACED ALL OVER THE COUNTRY OTHER THAN NORTH EASTERN REGION

Minimum service charges will be 0.25% for the first 30 days and thereafter 0.08% per week subject to maximum of 3% of the Principal amount (i.e. amount of invoice to be discounted).

OR

Commitment charge @ 2% p.a. on the limit sanctioned to be collected in advance.

FOR UNITS PLACED IN NORTH EASTERN REGION

Minimum service charges will be 0.13% for first 30 days and thereafter 0.04% per week subject to a maximum of 1.50% of the principal amount (i.e. amount of invoice to be discounted).

OR

Commitment charge @ 1% p.a. on the limit sanctioned to be collected in advance.

PROCESSING FEE

(i) Processing Fee shall be collected in advance on receipt of application and will be non-refundable. The processing fee shall be 0.2% of the limit applied for.

(ii) At the time of processing of application for enhancement of limit, the rates shall be the same as at (i) above.

(iii) At the time of processing of application for renewal of limit, the rates shall be fifty percent of the rates as at (i) above.