Kailash Bikas Bank Offers Various Kinds of Loans. For more details:

Loan Types

Introduction

Agriculture is the backbone of Nepal’s economy. Major portion of GDP is dominated by agriculture. Though agriculture has major contribution in the nation’s economy, no step has been taken to modernize it. Farmers are facing several problems, such as lack of fertilizers, insecticides, use of modern tolls etc. Investment in agriculture sector is very low. Agriculture sector should be kept in priority & investment in this sector should increase, which will directly help the economy growth of our country.

Purpose

Main aim of KBBL agriculture loan is to finance lower & middle class farmers to modernize the agriculture system & increase productivity by use of modern tool, modern technology, fertilizers, insecticides, hybrid & high quality seed etc.

Target Segment

  • Low income bracket farmers.
  • Agricultural entrepreneurs.
  • Farmers working collectively for agriculture.
Eligibility of the borrower
  • Nepali Citizen.
  • Should not be black listed with any other bank & financial Institution.

Financing Ratio

The Annual Net Disposable Income shall not be less than 1.25 times the annual interest/installment commitment.

Security
  • Land or building mortgaged in favor of KBBL.
  • Personal Guarantee of the Borrower.
  • Personal Guarantee of Undivided Family Members. ( Optional and upon availability)
  • Personal Guarantee of any other Person, acceptable to KBBL. (Optional)
Tenure Period
  • Agriculture loan shall be for maximum period of five year in case of procurement of tools, machinery or infrastructure preparation or one year / or crop season depending upon the nature of the loan.
  • Animal husbandry loan shall be for maximum period of five years.
  • Agriculture overdraft shall be made available with one year period.
Quantum of Loan

The loan shall not exceed more than 70% of the fair market value of the mortgaged security as certified by the approved valuator/employee of KBBL.

The maximum of such loan shall be Rs 2.5 million.

Repayment Scheduling

The repayment of the loan disbursed shall be in following ways.

  • Monthly interest payment and lump sum payment of loan at the end of the tenure with option of renewal/seasonality.
  • Equated Monthly Installment

The payment of installment shall start after one month from the date of disbursement of loan & shall not exceed the above mentioned period.

Grace period

Interest paying Grace period shall be provided to the extent of one year depending upon the nature of purpose.

Interest, Fee, Charges, Commission & Penalties
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

Business and Industry provide the support to the economy by generation of revenue to government, employment opportunities and also support the overall economic growth.

KBBL aims to provide business loans to various business and industry segment as a one door business solution which will be a combination of different financial requirements ie, Term Loan, Working Capital Loan, Overdraft, Hire Purchase and a combination of Guarantees and commitments.

These facilities will allow flexibility in funds withdrawal and repayment at the borrower’s convenience along with support in setting up business entity’s infrastructure, management of Stocks, receivables and also make competitive in market through efficient fund management solutions.

Purpose

The loan shall be a combination of:

a) Fixed Term Loan

Fixed Term loan shall be made to finance the machinery, infrastructure, construction of leasehold premises, building of office/Factory, renovation, refurbishing of existing infrastructures, Advertisement Campaigning or for any other business venture. The fixed term loan shall also be available to finance the core-working capital requirement. The repayment of Fixed Term loan shall be structured in accordance to the cash flow and seasonality of the business that would best suit the clients need.

b) Short Term Working Capital Loan

Short term loan shall be made to finance the increased working capital requirement of the customer because of seasonality of the business or increase the capacity of the client to hold higher volume of stock or to expand the credit sales in order to capture the market. The STLs shall be with maturity less than 1 year and shall be in standby to provide the client with that competitive edge in the market.

c) Loan against Stock Pledge

Short term loan shall be made to finance the immediate need of funds or to provide leverage in cash flow by way of pledge of acceptable stocks of the client.

d) Overdraft

Overdraft limit shall be provided to each customer as a fund management account and nominee account for all the exposure to the client. Overdraft limit provides the flexibility of the management of funds when needed and also shall reduce the loan and interest cost when the funds are in surplus.

e) Hire-purchase Loan

Hire purchase loan shall be provided as per the Hire purchase Loan Product paper.

f) Non funded Facilities(If Any)

Non funded facilities like advance payment guarantee, financial guarantee or any other commitment ancillary to funded facilities may be required by the client for support to business. Such facilities shall be provided to the client in package.

Target Segment

  • Business Enterprises
  • Industries
  • Service Sector Companies
Eligibility of the borrower
  • Entity Registered in Nepal.
  • Reliable income source.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Should not be black listed with any banks & financial institutions.

Financing Ratio

The Debt equity ratio shall not exceed more than 70:30. In any case, it has to exceed such loans shall be adequately backed by sufficient collateral margin.

The Debt Service Coverage ratio shall be more than 1.25.

Security
  • Land or Land and building mortgaged in favor of KBBL.
  • Stocks acceptable to KBBL for pledge (in case of Pledge Loans).
  • Corporate Guarantee of the Entity.
  • Personal Guarantee of the Owners/ Proprietor of the Entity.
  • Personal Guarantee of Undivided Family Members. (Optional and upon availability)
  • Personal Guarantee of any other Person, acceptable to KBBL. (Optional)
Tenure Period
  • Revolving nature of loan will have maximum one year tenor & shall be renewed only upon satisfactory transaction record.
  • Fixed term nature will have maximum of 15 years.
  • The interest paying grace period shall not exceed 6 months, if grace period needed is higher than 6 months specific prior approval of Head Business shall be taken.
Quantum of Loan

The loan shall not exceed more than 70% of the fair market value of the mortgaged security as certified by the approved valuator of KBBL. However, loan financing shall be done up to 100% of the fair market value of collateral upon approval from the Management Credit Committee.

Repayment Scheduling

The repayment of the loan disbursed shall be on two ways.

  • Monthly interest payment and lump sum payment of loan at the end of the tenure with options for renewal. In case of lump sum payment, the tenure of the loan shall not exceed more than one year.
  • Equated Monthly Installment

The payment of installment shall start after end of grace period from the date of disbursement of loan.

Interest, Fee, Charges, Commission & Penalties
  • Commitment fee shall be charged if the loan’s average utilization is less than 70%.
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Introduction

This is a simple facility under which the vehicle to be financed is taken as primary security & same to be registered in the name of KBBL. Additional collateral in different forms may be asked if the management deems it necessary. The bank will disburse its portion of financing only after the customer has invested its portion of equity or the bank will make the full payment after the customer deposits his share of equity in the account. Payment will be made directly to the supplier of the vehicle. (Including body making). Hire purchase loan shall be provided towards the purchase of vehicle (commercial/private/two wheelers/heavy equipments.)

Purpose
  • Purchase of vehicle for private use.
  • Agriculture & transportation purpose. (eg- Tractor, Truck)
  • Purchase of vehicle for commercial & business use.
  • Purchase of heavy equipments for the rental or captive use.
  • To assist in business set up.

Target Segment

  • Individuals, Construction companies, Travel Agencies, Re-financing Companies.
  • Farmers
  • Professionals e.g.- Doctor, Engineer, CA etc.
  • Persons involved in transportation business.
  • Business Man.
  • Self employed individuals.
Eligibility of the borrower
  • Nepali citizen, company/firm registered in Nepal.
  • Reliable income source or realistic financial projection.
  • Should have repayment capacity and favorable credit rating.
  • Should have involved in related work/business in case of commercial vehicle.
  • Should not be black listed with any other bank & financial institution.

Financing Ratio

Private Vehicle (New)

In case of Private Vehicle Financing ratio shall be 70:30 of the invoice value of the vehicle. It means 70% of the cost shall be borne by KBBL & remaining 30% shall be borne by customer.

Private Vehicle (old)

In case of used private vehicles, the financing ratio shall be 60:40 of the valuation of the vehicle. The valuation of the vehicle shall be from the authorized valuators empanelled with KBBL.

Commercial Vehicle (New)

In case of commercial vehicle KBBL shall finance maximum of 80% of the Chassis Value & 50% of the body building cost, which shall not be more than 70% of the whole vehicle.

Commercial Vehicle (old)

In case of used commercial vehicles, the financing ratio shall be 60:40 of the valuation of the vehicle. The valuation of the vehicle shall be from the authorized valuators empanelled with KBBL.

Waiver

In any case, if the financing ratio has to be increased beyond the ratio as mentioned above, approval from the management credit committee shall be taken.

Security
  • The financed vehicle shall be taken as primary security. Blue book of the financed vehicle should be in the name of KBBL. KBBL may ask for other security if required.
  • Personal guarantee of the borrower & other relevant individuals.
  • Corporate guarantee in case of company.
Tenure Period

Loan period shall be maximum seven years. However loan period shall not exceed more than 10 years from the year of manufacturing of the vehicle.

Repayment Scheduling

The loan shall be repaid in Equated Monthly Installment over a period of maximum five years.

Interest, Fee, Charges, Commission & Penalties

Shall be as per the Standard Charge Card (SCC) issued by KBBL.

Special Conditions
  • The loan shall be disbursed on lump sum basis & shall be directly paid to the seller.
  • In case of old vehicle, it should be valued by the approved valuator of the bank & the bank staff should also cross verify the value of vehicle by looking into the market price, number of kilometers the vehicle has run, condition of the vehicle etc.
  • Comprehensive insurance policy of the financed vehicle shall be lodged with KBBL for amount covering the cost of vehicle or 150% of loan amount. First beneficiary of the insurance shall be KBBL.
Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

This is a simple facility caters to the financing needs of doctors, contractors etc. in order to assist them in setting up their business. Private clinics, hospitals & diagnosis centers are on the rise; similarly contractors are setting up their own consultancy firms to cater the requirements of the ever-rising population of the country. The equipment purchased/financed shall be kept as security. Local distributors of such equipment have to be tapped who will then refer their clients to KBBL.

Purpose

 

  • Purchase of plant/machinery/equipment & their setup.
  • To assist in business set up by financing in the major cost area.

 

Target Segment

  • Professionals- Doctors, Engineers, Technicians
  • Contractors for equipment
  • Business man
  • Builders

 

Eligibility of the borrower

 

  • Nepali citizen, company/firm registered in Nepal.
  • Reliable income source or realistic financial projection.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Feasibility report, financial projection & cost of related setup in case of new venture.
  • Should not be black listed/defaulter with any other bank.

 

Financing Ratio

 

Financing ratio shall be 80:20. It means 80% of the cost shall be borne by KBBL & remaining 20% shall be borne by customer. However quantum of loan shall not exceed 80% of the fair market value of the mortgaged property.

 

Security

 

  • Security shall be the related equipment /machinery itself. KBBL can seek for additional security in the form of fixed assets if required.
  • Personal guarantee of the borrower & other relevant individuals or company.

 

Tenure Period

 

Loan shall be for maximum period of 5 years.

 

Quantum of Loan

The loan shall not exceed more than 80% of the fair market value of the financed equipment/machinery etc.

Repayment Scheduling

 

The loan shall be repaid in Equated Monthly Installment over a period of maximum five years. Interest calculation shall be either monthly or quarterly.

 

Interest, Fee, Charges, Commission & Penalties

Shall be as per the Standard Charge Card (SCC) issued by KBBL.

Special Conditions

 

  • The loan shall be disbursed on lump sum basis.
  • Comprehensive insurance policy of the financed equipment/machinery shall be lodged with KBBL for amount covering the loan. First beneficiary of the insurance shall be KBBL.
  • KBBL shall start recovery action including seizure of equipment/machinery or auction of the same once the loan falls two three months in arrears.

 

Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

 

Education sector is one of the sectors where significant development has taken place during the last one decade. Most of the students in the country are persuading their studies inside the country or abroad after completing their school level study. The education in the country and abroad has been very expensive these days and most of the Nepalese families are unable to bear entire cost of education of their children at once. Hence Education Loan has been introduced to support the education of the students.

Education loan shall be disbursed as an asset based lending to the students willing to undergo higher studies in Nepal or abroad.

 

Purpose

 

  • Admission and tuitions fees & deposit in case of medical sciences.
  • Cost of travel for studies abroad,
  • Textbooks, boarding/lodging expenses.

Target Segment

Major targeted segment for this loan is 18 to 45 years age group students studying under graduation, graduation, M-Phil, Doctorate or any other technical & professional degree in any field.

Eligibility of the borrower

 

  • Student should be a Nepalese Citizen.
  • Sufficient income of the parent/guardian to service debt EMI.
  • Confirmation of admission from a recognized university or institution.
  • Loan to be in the name of parents /guardians & student should be guarantor.
  • Should not be black listed with any other bank & financial institution.

Financing Ratio

Financing ratio shall be 70:30. It means 70 % of the total study cost shall be financed by bank & remaining 30% shall be borne by the guardian/parents of the student subject to the maximum limit of this product.

 

Security

 

  • Personal Guarantee of Sponsor/parents/guardian.
  • Personal Guarantee of the Student.
  • Land or building mortgaged in favor of “KBBL”.
  • Insurance of the student covering full value of loan.

 

Tenure

 

Maximum tenure of such disbursement shall be for 10 years.

Interest, Fee, Charges, Commission & Penalties

Shall be as per the Standard Charge Card (SCC) issued by KBBL.

Repayment Scheduling

 

The repayment of the loan disbursed shall be on following ways.

  • Monthly interest payment during the entire tenure and lump sum payment of loan at the end of the tenure.
  • Interest payment for the moratorium period up to 5 years, then payment of loan in Equated monthly installment for the remaining period.
  • Equated Monthly Installment from the beginning

 

Note

  • The payment of interest shall start 1 month from the date of disbursement of loan.
  • The loan should be repaid within one year if the student drops out of course.

 

Special Conditions

 

  • The offer letter for such loan shall be issued only on advance payment of the processing fee.
  • The disbursement of loan shall be in installments after the mortgage of the property provided as security.
  • The student shall be insured against accidents up to the value of loan during the tenure of the loan as far as possible.
  • The original receipts of such payments to the institution should be submitted.
  • The copy of results of each semester/ program should be submitted.
  • In any case, the loan sanctioned shall not burden more than 70% of borrower’s monthly income in EMI servicing or interest servicing.

Loan Form & Security Documents

The loan forms and security documents shall be as prescribed by KBBL.

 

Introduction

Small and Medium Enterprises (SME) are backbone of country’s economy. SME’s contribute to the country’s economy in a very unique way by a combination of consumption, production, distribution and service. Enterprises are normally semi-organized entrepreneurs venturing on small scale business endeavors.  KBBL aims to cater this segment with hassle free business solution which will be a combination of different financial requirements ie, Term Loan, Working Capital Loan, Overdraft, Hire Purchase and a combination of Guarantees and commitments.

This facility will allow flexibility in funds withdrawal and repayment at the borrower’s convenience along with support in setting up business entity’s infrastructure, management of Stocks, receivables and also make competitive in market through efficient fund management solutions.  The loan shall be processed quickly and the clients will feel they have been kept on priority. Due to lower processing time, clients can also promote the product by word of mouth to other needy people requiring such product.

Purpose

The main purpose of this Loan Package is to provide one door financial solution to small and medium enterprises in supporting their financial needs.

The loan shall be a combination of:

a) Fixed Term Loan

Fixed Term loan shall be made to finance the machinery, infrastructure, construction of leasehold premises, building of office/Factory, renovation, refurbishing of existing infrastructures, Advertisement Campaigning or for any other business venture. The fixed term loan shall also be available to finance the core-working capital requirement. The repayment of Fixed Term loan shall be structured in accordance to the cash flow and seasonality of the business that would best suit the clients need.

b) Short Term Working Capital Loan

Short term loan shall be made to finance the increased working capital requirement of the customer because of seasonality of the business or increase the capacity of the client to hold higher volume of stock or to expand the credit sales in order to capture the market. The STLs shall be with maturity less than 1 year and shall be in standby to provide the client with that competitive edge in the market.

c) Overdraft

Overdraft limit shall be provided to each customer as a fund management account and nominee account for all the exposure to the client. Overdraft limit provides the flexibility of the management of funds when needed and also shall reduce the loan and interest cost when the funds are in surplus.

d) Hire-purchase Loan

Hire purchase loan shall be provided as per the Hire purchase Loan Product paper.

e) Non funded Facilities(If Any)

Non funded facilities like advance payment guarantee, financial guarantee or any other commitment ancillary to funded facilities may be required by the client for support to business. Such facilities shall be provided to the SME client in package.

Target Segment

  • Small and Medium Enterprises which are registered to government agencies.
  • Small scale industries, wholesalers, Shops, service providers like schools, travel agency, hotel, hospital or any other enterprise.
Eligibility of the borrower
  • Entity Registered in Nepal.
  • Reliable income source.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Should not be black listed with any banks & financial institutions.

Financing Ratio

The Annual Net Disposable Income shall not be less than 1.25 times the annual interest/installment commitment.

Security
  • Land or Land and building mortgaged in favor of KBBL.
  • Personal Guarantee of the Owners/ Proprietor of the Entity.
  • Personal Guarantee of Undivided Family Members. ( Optional and upon availability)
  • Personal Guarantee of any other Person, acceptable to KBBL. (Optional)
Tenure Period
  • Revolving nature of loan will have maximum one year tenor & shall be renewed only upon satisfactory transaction record.
  • Fixed term nature will have maximum of 15 years.
  • The interest paying grace period shall not exceed 6 months, if grace period needed is higher than 6 months specific prior approval of Head Business shall be taken.
Quantum of Loan

The loan shall not exceed more than 70% of the fair market value of the mortgaged security as certified by the approved valuator of KBBL. However, loan financing shall be done up to 100% of the fair market value of collateral upon approval from the Management Credit Committee.

In any case, the loan exceeding Rs 7.5 Million in Funded exposure and Rs 10 Million in Total exposure shall not be booked under SME Loans.

Repayment Scheduling

The repayment of the loan disbursed shall be on two ways.

  • Monthly interest payment and lump sum payment of loan at the end of the tenure with options for renewal. In case of lump sum payment, the tenure of the loan shall not exceed more than one year.
  • Equated Monthly Installment

The payment of installment shall start after end of grace period from the date of disbursement of loan.

Interest, Fee, Charges, Commission & Penalties
  • Commitment fee shall be charged if the loan’s average utilization is less than 70%.
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

Home is dream for every Nepali Citizen. Home loan is a type of loan where a customer avails of loan for part financing accommodation facility where the customer has identifiable and stable income source. Such loan is repayable by equated installment over a number of years.  Home loan scheme is targeted to people & companies to fulfill their dream of having their own home or office. Home loan shall be disbursed as an asset based lending for the purpose of purchase of home/ land or construction of home.

Purpose

 

  • Purchase of Land (Strictly to build residential building)
  • Purchase of Residential Building
  • Purchase of Apartments.
  • Construction of residential building.
  • Renovation & extension of existing residential building.
  • Refurbishing of residential building.
  • Swapping of housing loans from other financial institutions.

Target Segment

  • Middle & upper middle-income bracket of society.
  • Professionals & salaried individuals.
  • Senior & middle managerial persons.
  • Business man.
  • Salaried, self employed individuals/proprietorship.
Eligibility of the borrower

 

  • Nepali citizen.
  • Reliable income source.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • The age of the borrower shall not exceed 65 years.
  • However, if there is a guarantor of undivided family and the income of the guarantor is sufficient to repay the installment, this clause may be waived.
  • Should not be black listed with any banks & financial institutions.

 

Financing Ratio

 

The Annual Net Disposable Income shall not be less than 1.25 times the annual interest/installment commitment.

 

Security

 

  • The purposed building/ land/apartment for construction/ purchase/renovation shall be mortgaged with KBBL.
  • Personal guarantee of spouse or one family member whose income is included in calculating family income.
  • Personal guarantee of any other person acceptable to KBBL.

 

Tenure Period

 

  • Loan shall be for maximum period of 20 years excluding grace period if any provided.
  • The interest paying grace period for shall not exceed 1 year.
  • In case the grace period needed is more than 1 year prior approval of Board shall be taken with proper justification.
Quantum of Loan
  • The loan shall not exceed more than 2/3rd of the fair market value of the mortgaged security as certified by the approved valuator of KBBL.
  • The loan disbursement on home construction/ renovation shall be on progressive basis as certified/ reviewed by engineer/ KBBL staff.

 

Repayment Scheduling

 

The repayment of the loan disbursed shall be on following ways.

  • Equated Monthly Installment (EMI)

The payment of interest shall start one month from the date of disbursement of loan, EMI shall start on completion of grace period or as requested by the borrower whichever is earlier.

 

Interest, Fee, Charges, Commission & Penalties
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Special Conditions

 

  • Loan shall be utilized for the said purpose & documents showing utilization of the loan for the said purpose shall be submitted.
  • If the collateral is land & building, building shall be insured if the value of land is not sufficient to cover the loan amount.
  • Progress report shall be submitted in case of construction /renovation of building.
  • If the property acquired has registered value less than the loan amount, by mode of Rajinama, minimum 6 months & 35 days and if acquired through Bakas Patra, minimum 2 years has to be elapsed from the date of such transfer.

However, specific waiver shall be taken from the CEO if such conditions are not fulfilled.

  • Any land belonging to Guthi, shall be taken as collateral for home loan as per the specific Guthi laws.

 

Loan Forms and Security Documents and other documentation
  • The loan forms and security documents shall be as prescribed.
Introduction

This is a simple overdraft facility which caters to the personal financing needs of salaried, self employed, professional. This facility will allow flexibility in funds withdrawal & repayment and allow the borrower convenience.  Loan against share shall be disbursed as an asset based lending to meet the financial need of the borrower.

Purpose

 

  • Any personal needs in case of person.
  • Any business need/ working capital in case of institution.
  • Starting new business.
  • Personal expenses etc.

Target Segment

  • Any individuals/ institutions
  • Professionals & salaried individuals.
  • Senior & middle managerial persons.
  • Business man.
  • Salaried, self employed individuals/proprietorship.

 

Eligibility of the borrower

 

  • Nepali citizen, company registered in Nepal.
  • Share brokers & investment companies are not allowed to avail this loan.
  • Person/Institution having reliable income source.
  • Should not be black listed with any banks& financial institutions.

 

Security

 

  • Pledge over the ordinary shares or promoter shares and lien of right/bonus issues & original shares.
  • Right to receive dividend.
  • Personal guarantee of the shareholder.
  • Shares should be listed in Nepal Stock Exchange (NEPSE).
  • In case of institution, the shares shall be owned by institution itself or its proprietor/director/shareholder/partner etc.
  • In case of third party share consent of the third party has to be obtained.

 

Tenure Period

 

  • Loan shall be of revolving in nature like an overdraft and shall be provided for a period of one year only. Loan can be renewed after completion of one year.

 

Quantum of Loan
  • The loan amount shall be 60 % of the pledged share’s average market price of last 180 days or present market price of shares whichever is lower.
  • Specific approval shall be taken from Head Business in case margin has to be increased above the prescribed limit.
Repayment Scheduling

The repayment of the loan disbursed shall be:

  • Monthly interest payment and lump sum payment of loan at the end of the tenure with options for renewal.
  • In case of lump sum payment before maturity there shall be no prepayment charges.

 

Interest, Fee, Charges, Commission & Penalties
  • Commitment fee shall be charged @ 0.50% per quarter on un-utilized portion of the loan, if the loan’s average utilization is less than 50%. However, any specific margin calls shall not be considered in calculation of such utilization.
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Special Conditions

 

  • Any downward movement in the price of shares should require re-margin by pledging additional shares or repayment of loan to the extent required for the purpose.
  • Any re-margin call should be addressed by the borrower within 14 days else the bank should proceed with the sale of the shares.
  • Original share certificates shall be pledged with KBBL.

 

Loan Forms and Security Documents and other documentation
  • The loan forms and security documents shall be as prescribed.
Introduction

This is simple facilities which do not involve transfer of fund but may subsequently turn into a funded facility such as Letter of Credit, Bank Guarantee etc. Where the Bank makes payment pursuant to invocation of guarantee issued by it then the non funded facility converts into funded loan. Non funded facilities are those commitments made by a financial institution that are contractual obligations for future funding.

 

Definitions

Bank Guarantee

Bank guarantees are written obligations of the issuing Bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not perform the obligation. It is the liability of Bank & Financial Institution to make payment for any valid claim made within the period prescribed in the Guarantee. Bank Guarantee shall be treated as funded loan if any valid claim is made & same resulted outflow of fund.

 

Bid Bond Guarantee

Bid Bond guarantee is a guarantee to be given in submission of tender. The Tender Inviter may ask for Bid Bond Guarantee equivalent to amount of earnest money to be deposited at the time of calling the tender.

 

Performance Bond Guarantee

This guarantee is issued to cover the loss that may arise to the Beneficiary due to non completion of the assigned task in the scheduled time by the Client. Generally this guarantee is issued to perform the contract within the stipulated time. If the Client failed to perform his duty in the stipulated time, Beneficiary may make claim with the financial Institution.

 

Advance Payment Guarantee

Employer Company used to provide prescribed percentage of amount as advance to the Contractors & Suppliers. Employer Company may ask for Advance Payment Guarantee for the advance amount so provided. Advance Payment Guarantee is the guarantee issued by Banks & Financial Institution in favor of Employer Company on behalf of Contractors & Suppliers. Advance Payment Guarantee shall be issued for a period starting from receipt of advance & till the settlement of same.

 

Financial & Other Guarantee

This includes other different kinds of guarantees such as Payment Guarantee, Deferred Payment Guarantee, Deposit Guarantee, Counter Guarantee etc.

 

Purpose

The main purpose of this facility is to avoid the immediate cash outflow of the client by providing assurance to the third party on behalf of the client.

 

Target Segment

  • Contractors
  • Suppliers
  • Business man
  • Service Provider
  • Firm & Companies involved in above activities.

 

Eligibility of the borrower

 

  • Nepali Citizen.
  • Firm & Companies registered in Nepal.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Should not be black listed with any banks & financial institutions.

 

Financing Ratio

 

The Annual Net Disposable Income shall not be less than 1.25 times the annual interest/installment commitment.

 

Security

 

  • Land or building mortgaged in favor of KBBL.
  • Cash Backed Collateral.
  • Personal Guarantee of the Borrower.
  • Corporate Guarantee.
  • Personal Guarantee of any other Person, acceptable to KBBL. (Optional)

 

Tenure Period

 

  • Bank Guarantee shall be issued for a maximum period of one year with renewal option at the end.
  • Bid bond guarantee shall be issued for such period as specified in the bid & shall be valid until the bid is awarded.
  • Performance bond guarantee shall be issued for a maximum period of one year with renewal option at the end.
  • Advance Payment Guarantee shall be issued for a period starting from receipt of advance & till the settlement of same. Period of Advance Payment Guarantee shall be clearly mentioned in the guarantee letter.

 

Special approval shall be taken from Head Credit for tenure exceeding mentioned above.

 

Quantum of Loan

The non funded facility shall not exceed more than 80% of the fair market value of the mortgaged security as certified by the approved valuator of KBBL.

But facility up to 100% of the security shall be provided if it is secured by cash backed collateral such as Fixed Deposit etc.

Specific approval shall be taken from Head Business in case loan amount exceeding the above mentioned margin.

 

Repayment Scheduling

 

Since it is a facility & there is no outflow of fund question of repayment doesn’t arise but,

  • Commission shall be paid on lump sum before issuance of non funded facilities.
  • If any claim made by the beneficiary & that result outflow of fund client shall pay the whole amount of such claim without any delay as and when called by KBBL.

 

Interest, Fee, Charges, Commission & Penalties
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
  • If the non funded facility is converted in to funded loan, highest rate of interest published by KBBL shall be charged on the same.
Special Conditions

 

  • The purpose the non funded facility shall be clearly mentioned in the application form, and if required KBBL must verify the purpose during credit application processing.
  • Client shall make payment to KBBL if any valid claim is made by the beneficiary & that result outflow of fund.

 

Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

This is a simple Overdraft/ Term Loan facility which caters to the personal financing needs of salaried, self employed, professionals & owners of business. This facility will allow flexibility in funds withdrawal and repayment at the borrower’s convenience. The loan can be processed quickly and the clients will feel they have been kept on priority. Due to lower processing time, clients can also promote the product by word of mouth to other needy people requiring such product.

Purpose

The main purpose of this loan is to meet any kind of personal need of the customer and their family. The loans shall be provided for a diverse purpose like equity investments, home renovation, social needs, travel expenses, marriage ceremony, medical treatment,  purchasing consumer durables or to support any obligation or for any other legitimate purpose.

Target Segment

  • Middle & upper middle-income bracket of society.
  • Professionals & salaried individuals.
  • Senior & middle managerial persons.
  • Business man.
  • Salaried, self employed individuals/proprietorship.

 

Eligibility of the borrower

 

  • Nepali Citizen.
  • Reliable income source.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Should not be black listed with any banks & financial institutions.

 

Financing Ratio

 

The Annual Net Disposable Income shall not be less than 1.25 times the annual interest/installment commitment.

 

Security

 

  • Land or building mortgaged in favor of KBBL.
  • Personal Guarantee of the Borrower.
  • Personal Guarantee of Undivided Family Members. ( Optional and upon availability)
  • Personal Guarantee of any other Person, acceptable to KBBL. (Optional)

 

 

 

Tenure Period

 

  • Revolving nature of personal loan will have maximum one year tenor & shall be renewed only upon satisfactory transaction record.
  • Personal loan of fixed term nature will have maximum of 15 years.
  • The interest paying grace period shall not exceed 6 months, if grace period needed is higher than 6 months specific prior approval of Head Business shall be taken.
Repayment Scheduling

 

The repayment of the loan disbursed shall be on two ways.

  • Monthly interest payment and lump sum payment of loan at the end of the tenure with options for renewal. In case of lump sum payment, the tenure of the loan shall not exceed more than one year.
  • Equated Monthly Installment

The payment of installment shall start after one month from the date of disbursement of loan.

 

Interest, Fee, Charges, Commission & Penalties
  • Commitment fee shall be charged @ 0.50% per quarter on un-utilized portion of the loan, if the loan’s average utilization is less than 70%.
  • Shall be as per the Standard Charge Card (SCC) issued by KBBL.
Special Conditions

 

  • The purpose of the loan must be clearly mentioned in the credit application form, and if required KBBL must verify the purpose during credit application processing.

 

Loan Forms and Security Documents and other documentation

The loan forms and security documents shall be as prescribed.

Introduction

Gold/silver loan refers to the loan provided to any person against the security of Gold, silver, Jewelries & ornaments of gold & silver, Utensils of gold & silver, gold & silver coins etc. Gold loan is meant for those people who need fast cash to fulfill their sudden financial need. This loan is provided with several benefits to customer in a simplified procedure. This loan is provided by pledging the gold/silver of the customer.

Purpose

The main purpose of this loan is to meet any kind of personal & sudden need of the customer and their family. This loan shall be provided for diverse purpose like to meet personal & social obligation, to meet the daily needs, to meet the short term need of fund, or for any other legitimate purpose.

Target Segment

Any persons who are in need of fund & meet the eligibility criteria.

 

Eligibility of the borrower

 

  • Any person.
  • Minimum 18 years of age.
  • Should have a good reputation, repayment capacity and favorable credit rating.
  • Should not be black listed with any banks & financial institutions

 

Note

  1. In case of Indian Citizens valid copy of passport or the Identification Card issued by Indian Embassy is required.
  2. In case of foreign citizens loan can be provided till the period of Valid Visa only.
  3. Staff of own banks are also eligible for the gold/silver loan.

 

Security  & Valuation

 

  • Gold & Silver Coins.
  • Ornaments & Jewelleries of Gold.
  • Gold Utensils.
  • Gold & Silver Ingots.

 

Gold/Silver shall be valued by the approved gold tester of the bank. Gold tester shall determine the value on the basis of quantity, quality & condition of the gold/silver by weighing & examining same in front of the customer & by taking the average market price of last one month. The detailed valuation procedure is laid down in the Credit Operational Manual.

 

Note

 

  1. The approved gold tester shall issue a valuation certificate.
  2. The valuation amount shall be rounded up to nearest multiple of 1000.

 

Tenure Period

 

  • Loan shall be provided for a maximum period of one year & can be renewed thereafter if satisfactory performance is noted.

 

 

Repayment Scheduling

 

The repayment of the loan disbursed shall be on following ways.

  • Quarterly interest payment & Lump sum payment of principal at the end.
  • Quarter end means quarter end as per Nepali Calendar, i.e. Ashwin, Poush, Chaitra & Ashad end.

 

Interest, Fee, Charges, Commission & Penalties
  • Rate of interest shall be 13 -15%. This may change from time to time.
  • 1% of the valuation amount shall be taken as charges for insurance & other costs at the time of settlement of loan.
Special Conditions

 

  • If there is any doubt in the purity of gold/silver the gold tester with prior approval of the borrower can test by cutting it or by keeping it in the fire.
  • Gold/silver taken as security shall be fully insured & charges for same shall be taken from customer.
  • If there is any decrease in market value & the amount of loan including outstanding interest value of pledged gold/silver including outstanding interest is not sufficient to cover the loan amount bank shall call for the margin & borrower shall deposit the margin money within 7 days.
  • If there is any default in repayment bank shall auction the pledged gold/silver by following procedure of bank.

 

Margin Call

 

Margin shall be called in the following two conditions.

  • If the amount of loan including outstanding interest exceeds 90% of the value of gold & silver.
  • Decrease in value of Gold/ Silver by 10% & loan plus outstanding interest exceed 90% of the value.

 

Special approval from Management Credit Committee shall be taken in case of any deviation in above mentioned special conditions.

 

Loan Forms and Security Documents and other documentation
  • The loan forms and security documents shall be as prescribed.