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REGULATION-XVIII
MINIMUM CONDITIONS FOR GRANT OF FINANCING FACILITIES
When considering
proposals for fund based/non-fund based accommodation banks should give due weightage to
credit report relating to the borrower and his group obtained form Credit Information
Deptt. of the State Bank. if the credit report indicates over-exposure/default in meeting
the obligations and in the opinion of the bank the default/over-exposure is willful or the
unit is no longer viable further accommodation may be denied. However, if the
default/over-exposure is due to circumstances beyond the control of the borrower and
further accommodation would put the borrower back on track and enable it to regularize the
position, the bank may consider extending accommodation as it may deem fit.
2. Borrowers, specially Sick Units, facing
difficulties in regularizing their position within the time-frame envisaged in Prudential
Regulations-IV &V, could sparingly be exempted by the Boards of Directors of the
concerned banks only in special cases where regularisation period is longer and there is
enough justification to do so to help in rehabilitating the sick unit and recovering the
advances made by the bank.
3. In terms of BPRD Circular letter No. 19 dated the 15th June, 1997 guidelines have been
given for revival of Sick Industrial Units in addition to general incentive scheme. In
order to ensure that Sick Industrial Units may not face difficulties in making settlements
with banks/DFIs it has since been decided that the requirements laid down in terms of
Regulations No. IV and V of Prudential Regulations may be suitably relaxed on merits of
each case to achieve the desired objectives expeditiously.
