How to obtain EDC funds faster Industrial Development demands
speedy financial assistance at the right time and EDC is making conscious efforts to make speedy disbursements. It sometimes happens however, that quick disbursement of funds is not possible simply because some of the procedural
formalities involved before disbursement takes considerable time. With a view to facilitate compliance with these and there by make disbursement easier and speedier, we detail herein the prerequisites of disbursement of funds by
EDC.
I. Requirements to be complied with by the loanee preceding first disbursement.
1.
Execution of documents:
After the loanee has
complied with the terms and conditions stipulated by EDC for loan sanctioned
and the relevant legal requirements are completed to the satisfaction
of EDC Legal Section, EDC will be in a position to disburse the sanctioned
loan or such proportionate amount on the basis of stipulated security
margin on the fixed assets as approved by EDC.
2. Auditor's Certificate: Usually a condition is stipulated in the sanction letter that the loanee
should bring in his contribution during disbursement of EDC loan. Chartered
Accountant's Certificate in respect of capital position in the prescribed
format should be obtained in this regard, as an when the amount is invested
in the project, as per stipulated condition.
Since the loan is sanctioned for acquisition of fixed assets under
the scheme approved by EDC or in some cases for replenishment of funds
utilised therefore the loanee has also to submit the Chartered Accountant's
Certificate for the total expenditure incurred towards acquisition of
fixed assets detailing the type of assets acquired, value thereof that
has been paid by the loanee in the prescribed format.
As regards the plant and machinery, the list of items acquired and
value covered in the Chartered Accountant's Certificate need be annexed
to such a certificate together with invoices/bills arranged serially.
The list should correspond to the list proposed in the scheme approved
by EDC. The Chartered Accountant's Certificate should be complete in
all respect as per the prescribed format and should indicate Sr. No.
of machine etc.
For term loans up to Rs. 1 lakh (term loans up to Rs. 5.00 lakhs for acquisition
of single equipment) no chartered Accountant's certificate need be given.
3.
Insurance:
The assets as security
to EDC are required to be insured for fire, riots and strikes and malicious
damages. The loanee should therefore make arrangements for getting the
requisite insurance policies from the insurance companies for the full
value of the security offered and covering all the stipulated risks.
Such policy/policies should be in the joint name of EDC and the loanee.
It is essential that all the assets mortgaged, hypothecated to EDC are
fully insured at all times. In the case of assets under process of acquisition,
care should be taken to obtain requisite insurance cover promptly. An
open policy for building under construction and/or machinery ordered
and/or under erection may be obtained in time.
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