Allahabad Bank offers credit cards to various Medium and Small Enterprise individuals to meet their credit requirements. The cards come with multiple features and are available to a specified set of individuals. Let us take a look at the type of cards issued and the detailed features of each of the cards.
Allahabad Bank Weavers Credit Card (WCC) Scheme
Allahabad Bank Weavers Credit Card Schemes are type of credit schemes that help individuals who are basically involved in weaving as well as other ancillary activities. Not all consumers are eligible to enjoy these Allahabad Bank Credit cards. There are certain Allahabad Bank credit card eligibility criteria laid down by the bank. They are:
- Only artisans and weavers involved in weaving activities are offered Allahabad Bank Weavers Credit Card.
- Preferred artisans are the one who are recognized under the Third Census of Handloom weavers taken out by the Development Commissioners.
- Again, more stress is provided on weavers and ancillary workers who as a group have joined Societies/SHG/Consortia/Producer Companies and Joint Liability Groups for issuing the Allahabad Bank Credit cards
- Apart from that, the previous customers involved in credit activities and who holds a good banking transaction history is also eligible for this Allahabad Bank Weavers Credit Card
The total amount of loan against Allahabad Bank Credit Cards offered by the bank is based on a number of factors based on which the credit limit is fixed by the bank. They take into consideration the value of equipment and tools that will be required by the weavers. They also calculate the total requirement of working capital need by the artisan before fixing a credit limit. Generally, an individual can avail up to Rs. 2 lac credit amount against the Allahabad Bank Credit cards
Again, the bank has no credit margin on the Allahabad Bank Weavers Credit Card up to Rs. 25,000. If the amount exceeds above Rs. 25,000 20% margin is charged on the excess amount. The margin requirement is the amount of financing which is retained by the bank and is supposed to be provided by the credit card availing individual.
When a weaver or an artisan applies for these credit card schemes, he is liable to keep certain things as collateral. They are called security. These securities are basically of two types namely security primary and security collateral. Under security primary come two categories. They are:
- Working capital- mortgage of stocks, book debts and other types of current assets.
- Term loan- mortgaging plant and machinery and other assets for which the bank has paid the money.
On the other hand, the collateral security is hereby covered under CGTMSE.
Rate of Interest
The rate of interest for this type of credit card scheme charged from the credit cardholder basically depends on the money borrower’s money paying strength. It is basically Base Rate +1.50% Per annum with breaks every month on the Allahabad Bank Credit cards. Since the applicable Base Rate is currently 9.70%, the effective rate of interest on the card is equivalent to 11.20% per annum.
Period of Loan Repayment
The Weaver’s Credit Card is generally valid for 3 years and the loan period ranges between 5 to 7 years. The working capital loan period depends on its demand and is supposedly reviewed yearly.
Loan transmission channel
The Weaver’s credit card is basically a credit card offered by Allahabad Bank in all the rural as well as semi-urban branches of the country.
Allahabad Bank Laghu Udhyami Credit Card (LUCC) Scheme
Allahabad Bank Laghu Udhyami Credit Card is a credit card offered by Allahabad Bank to all the individuals who are the bank’s pre-existing customers falling under the division of Industries, Services and Business (ISB). All these customers must have a transaction record with the bank for the current 3 years and having a credit card limit of up to Rs. 10 lacs. The main aim of the bank is to offer working capital to such industries for purchasing raw materials needed to run the business. The Allahabad Bank Credit cards also offer term loan to the consumers in order to buy tools and equipment for executing the manufacturing process.
The amount of loan offered to the consumers varies from person to person. They offer loan to small scale enterprises, micro industries and to also self-employed professionals. The various loan amounts are as follows:
- Small-scale enterprises or Retailers- the loan amount equals to 20% of the yearly money turn-over stated for the purpose of tax. It can also be the previous 12 months’ turnover in the account being run whichever is greater.
- Self-employed professionals- for self-employed professionals, 50% of the gross yearly income stated as per the Income Tax Act can be offered as the total loan amount.
- Micro-enterprises- the loan amount for micro enterprises are offered as per the recommendations made by the Nayak Committee.
The margin of loan for Allahabad Bank Laghu Udhyami Credit Card is a total of 25% of the loan amount.
Allahabad Bank Laghu Udhyami Credit card also desires some sort of collateral or security. They are basically of two types:
- Security primary- security primary basically comprises of working capital involving mortgage of stocks, book debts and current assets as well as term loans involving mortgage of plant and machinery and assets that are capitalized by the bank.
- Security collateral- security collateral basically depends on the nature and portfolio of the money borrower and the amount of loan lay down by various ground rules of the Government of India.
The interest rate generally depends on the cash payment portfolio or strength of the person acquiring the amount. It is different between Base rates and equals to BR+5% per yearly with a break during every month as supposed to the risk rating of the account on the Allahabad Bank Credit cards
Period of Prepayment
The loan amount is available in all the branches of the branches of the Allahabad Bank. The tenure of prepayment on working capital is based on the need of the capital and is analyzed yearly. These Allahabad Bank Credit cards are issued for a valid period of 3 years and the tenure of loan ranges between 5 to 7 years.
Allahabad Bank Artisan Credit Card (ACC) Scheme
Allahabad Bank Artisan Credit Card Scheme is applicable only to artisans who are already existing customers of the bank with the benefit of credit of Rs. 2 lacs. That artisan must have good and healthy bank dealing and also should hold a good bank transaction record with the bank. Priority is given to artisans registered with the Development Commission and also artisans of SHG who have formed a group. Allahabad Bank Artisan Credit Card has the main aim to offer working capital for buying raw materials for manufacturing process and offering term loans for acquiring tools and equipment needed in the process of production can avail of Allahabad Bank Credit cards under this scheme
Loan amount and Margin
The Allahabad Bank Artisan Credit Card scheme offers both term loans and working capitals to the artisans whose limit should not exceed Rs. 2 lacs. The total margin on the offered working capital is 20% and that of the term loan is 10% that is the minimum cost of the undertaken project at hand.
The Allahabad Bank Artisan Credit Card scheme undertakes security of two types basically. They are:
- Security primary- it comprises of working capital involving mortgaging the stocks, book debts and current assets and term loan involving the mortgage of plant and machinery and assets whose payment was made by the bank.
- Security collateral- it basically depends on the money paying strength of the borrower and the loan amount whose guidelines is laid down by the Government of India.
The rate of interest depends on the paying strength of the borrower and changes between Base rate 1.50% with breaks per month on the Allahabad Bank Credit cards
Period of prepayment
For working capital, the tenure of prepayment is evaluated every year. These Allahabad Bank Credit cards hold a validity of 3 years and the period of loan ranges between 5 to 7 years.
The bank has revised the general Credit Card scheme to include customers from all sectors, namely, rural, urban, semi-urban and metropolitan centers to avail of a credit card from the bank. The card is available for entrepreneurial non-farm or non-agriculture related activities. The scheme has been designed with an objective to allow credit flow to entrepreneurs in all parts of the country engaged in entrepreneurial activities which are not related to agriculture. This credit card scheme is this called a General Credit Card and will be available pan India. Any individual who is engaged in business which is not related to agriculture can avail of this credit card scheme. Women entrepreneurs are entitled to receive preferential treatment if they avail of this scheme.
The scheme provides credit facility in the form of a term loan or cash credit which the cardholder can enjoy only up to the limit allowed to him. The allowable credit limit provided to the borrower would be set depending on the term loan and working capital requirements of the borrower. The maximum limit is capped at Rs.25, 000. For a term loan facility, the allowable limit would depend on the cost of plant and machinery or equipment cost while in case of a cash credit facility, the limit would be equal to 20% of the projected sales turnover subject to the maximum ceiling of Rs.25, 000.no margin would be required by the bank and the rate of interest would be equal to the bank’s base rate as on the date of availing the scheme
A smart card or a debit card would be issued which would contain the details of the individual. Moreover, the validity of the card would be for 5 years from the date of issue subject to periodic evaluation by the bank on the repayment track of the borrower.
The repayment tenure of the loan would be a maximum of 60 months with a repayment holiday or moratorium of 6 months to 18 months depending on the borrower’s requirements. term loan is to be repaid within 42 to 54 months through EMIs while interest is to be paid even during the moratorium period. In case of cash credit, the repayment is to be completed within 12 months of availing the credit facility. A security is also required for the loan which would be the hypothecation of plant and machinery and entire movable assets of the business whether past or present in case of term loans. In case of cash credit schemes, the hypothecation would be done of stocks, book debts and other types of current assets. No processing fee would be applicable for this loan scheme, whether availed as a term loan or as cash credit and documents would be required under the loan which would be as per the bank’s guidelines. The progress of financing would be monitored and reviewed by the bank periodically to protect against defaults in repayments. These advances are classified as micro enterprise advances in the MSME category.
Card statement – a statement showing the credit card transactions, the amount paid and the amount outstanding to be paid is sent to the customer every billing cycle free of cost. This is the Allahabad Bank Credit Cards statement and reflects the card usage of the customer.
Online payment – the outstanding Allahabad Bank Credit Card credit card bills as reflected by the credit card statement can be paid online.
Apply for Allahabad Bank Credit Cards – one can apply for an Allahabad Bank credit card in any variety of the above-mentioned credit cards from Allahabad bank by simply visiting the Paisabazaar.com website and applying for the card. The website provides an online medium of application of the Allahabad Bank Credit Card which is both easy and hassle-free.