Foreign Currency Loan

ELIGIBILITY

• Exporters for working capital needs
• Importers for meeting import obligations
• Importers of capital goods
• Those customers who have earlier raised medium-term FC Loans for meeting capital expenditure from overseas financial institutions, so that these loans can be foreclosed (subject to RBI guidelines)
• Loan to JV/WOS entities of Indian companies.
•  High value corporate clients with a good track record, to meet working capital requirements in substitution of WCDL
• Those customers who are looking for conversion of rupee term/cash credit.

PERIOD

• Working capital for exporter/importer- 6 months to one year.
• Importers of capital goods-3 years  (subject to availability of funds)
• Substitution of WCDL/Cash Credit – 6 months to one year.
• In case of Term Loan Conversion- 6 months to 3 years (subject to availability of funds)

QUANTUM/ CURRENCY

• On transaction to transaction basis within the existing credit facilities
• Minimum USD 0.50 mn. (Rs. 2.00 Crores) equivalent.
• Normally in US$, FC Loans can also be availed in Pound Sterling or in Euros subject to availability of funds

RATE OF INTEREST

• Bench marked to relevant LIBOR rates.

REPAYMENT

• Bullet payment (one lump sum) by:
  Tendering export documents
  Proceeds of export collection bills
  Debit to EEFC accounts
  Purchase of foreign currency from the bank at contracted/ready rate if forward booking is waived.
• Term loans for import of capital goods – repayment in stipulated installments
• Conversion of rupee term loans – as per original sanction terms

For details mail to ibd@unionbankofindia.com with Sub: International Trade.

PROCEDURE

• Roll-over at the sole discretion of the Bank
• In case of loans on floating rate basis the rates will be reset once in every six months
• Interest charged on reducing balance method.
• Forward cover for appropriate maturity to be booked.
• Forward cover can be waived for customers having natural hedge.
• Prepayment generally not permitted
• In exceptional cases prepayment permitted. However, as an exception, prepayment is permitted in certain cases, with levy of penalty.