Corporate Finance

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Corporate Finance

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Revision of Reference Rates for determining Interest Rates on loans given

ABFL has increased its Long-Term Reference Rate (LTRR) by 20 bps to 20.45% p.a. with effect from March 1, 2024. The interest rate on the floating rate loans of tenor greater than 12 months that are linked to the LTRR will be revised upwards by 20 bps. The spread / margin on the said loans will remain unchanged.

ABFL has increased its Short-Term Reference Rate (STRR) by 20 bps to 19.45% p.a. with effect from March 1, 2024. The interest rate on the floating rate loans of tenor up to 12 months that are linked to the STRR will be revised upwards by 20 bps. The spread / margin on the said loans will remain unchanged. ​​​​​​​​​​

Emergency Credit Line Guarantee Scheme (ECLGS)

A new facility in accordance with the Emergency Credit Line Guarantee Scheme (“Scheme”) is launched by NCGTC (National Credit Guarantee Trustee Company Ltd., Ministry of Finance, Government of India).

Under the Scheme, an additional loan up to 20% of the outstanding as on February 29, 2020 can be extended. This facility will be valid for 4 years with a 12-month principal moratorium.

This loan offer is subject to you complying with the following additional requirements, as specified under the Scheme:

  • Annual turnover of the entity for the Financial year 2019-20 is not greater than Rs. 100 Cr.
  • Overall fund - based outstanding credit with all banks/NBFCs/FIs as on 29th Feb 2020 is not greater than Rs. 25 Cr.
  • No overdues beyond 60 days, across all banks/NBFCs/FIs as on 29th Feb 2020.
  • Availability of a valid GST registration, unless exempted.

Additional details of the above scheme is available on the following link:

https://www.eclgs.com/
KYC stands for ‘Know your Client’, a term commonly used for the Client Identification Process. SEBI has prescribed certain requirements relating to KYC norms for Financial Institutions and Financial Intermediaries, including Mutual Funds, to ‘know’ their clients. This is in the form of verification of identity and address, financial status, occupation, and other personal information.
Amortisation is paying off debts in regular instalments over a period.
A right over security is created in favour of ABFL. Hence, shares cannot be transferred or sold by the customer or shareholder.
A Guarantor is a person who guarantees to pay for someone else’s debt if he or she should default on a loan obligation.
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