Amount of Loan

The assistance will be need-based subject to the attainment of minimum economic size.

Promoters' contribution Minimum of 20% of the cost of the scheme.

Rate of interest

(a) Rupee Loan

Loans under TUF shall carry interest at normal applicable rates of the lending institutions prevailing at the time of sanction/execution of loan documents. Ministry of Textiles, Government of India will provide interest reimbursement of 5% p.a. which would be credited to the loan account of the borrower availing of assistance under TUF.

(b) Foreign Currency Loan

As applicable for normal FC Loan. However, Ministry of Textiles, Government of India would provide a cover for exchange fluctuations not exceeding 5% p.a.

Period of interest reimbursement

Interest reimbursement of 5% as also cover for exchange fluctuation will be available during the period of loan as specified in the Letter of Intent or as may be specified in the loan document. In case of subsequent extension of the repayment period, no incentive towards interest/exchange fluctuation will be available for the extended period.

Upfront fee:

1.05% of the amount of the loan.

Period of Loan

First charge on fixed assets. Additional security, such as personal/other guarantees and/or pledge of promoters' shareholdings might be stipulated by the lender, if consider necessary.

Conversion option

Not applicable, except in case of defaults.

Debt-equity Ratio

1.5:1 relaxable in exceptional cases.

Management

One of the main requirements for sanction of assistance under the TUFS will be the availability of competent management to the unit concerned to carry out the project implementation and also to manage the operations of the unit efficiently. Towards this end, IDBI may stipulate conditions relating to broad-basing of the Board, appointment of senior technical/financial executives, professionalisation of the management and constitution of such committees as may be considered necessary.

Working capital requirements

Since the success of the project would crucially depend upon the availability of adequate working capital to achieve the full benefit of the modernisation programme, IDBI would like to be assured that the units have made adequate arrangements with their bankers for meeting working capital requirements at reasonable rates of interest.

Role of nodal agency

1. Receipt of application;

2. Processing and sanctioning of loan assistance;

3. Attending to disbursement and other matters;

4. Setting up of a separate cell for TUFS; and

5. Furnishing information to Textile Commissioner periodically.

In view of likely expectation of large inflow of applications and the volume of assistance, it is proposed that other All India Financial Institutions viz., ICICI, IFCI and IIBI and some select banks will also receive applications and sanction and disburse assistance to the borrowers as per the TUFS norms. IDBI, being the nodal agency, will coordinate in respect of other banks and furnish the information to the Textile Commissioner direct.

General

Applications for assistance under the TUFS from non-SSIundertakings may be submitted in the prescribed form available from IDBI/ICICI/IFCI/IIBI. The applications duly completed (5 copies) may be submitted to any one of the four institutions either at their Head Offices or Zonal/Branch

Offices.