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.