A.

Working Capital may be financed to a project depending on the following policies:

*

To be a BSRS financed project.

*

The unit should be a profitable concern.

B.

Conditions:

The General Terms & conditions applicable for the short term credit may be summarized as under

*

For Hypothecated loan limit;
Mortgage of assets valuing twice of loan amounts

*

For pledged loan limit
Mortgage of all goods, raw materials purchased under finance. In addition, mortgage of additional security amounting twice of loan amount

*

General:

(a)

Current ratio should be maintained as 1.3;

(b)

Rate of interest should be fall quarterly basis as per rules circulated by Bangladesh Bank and BSRS;

(c)

Period of loan should be one year;

(d)

Renewal of loan depends on total recovery of loan & interest; and

(e)

The loan will be governed by all terms & conditions in BSRS Manual for Commercial Banking.

C.

Procedures:

The standard procedures may be classified as under:

At processing stage:

(a)

Fully documented loan case should be placed before the Credit Committee for its recommendation;

(b)

Assets to be mortgaged as security should be inspected by Bank Officials, as per effective circulars;

(c)

Loans should be sanctioned by the competent authority as per delegation of power; and

(d)

All processing should be completed within three months (after submission of fully documented loan application form);

(a)

All disbursement should be governed by the terms &
Conditions specified in the sanction letter;

(b)

Documentation should be completed within one month after issuance of Sanction letter.