Post Sanction Documentation involves formulating legally binding documents on the following:

• Loan agreement conveying the terms and conditions of the loan
• Documents conveying equitable mortgage on the primary security i.e. the fixed assets pertaining to the project and on the additional security (collateral).
• Personal Guarantee of the borrower and guarantor (if any).
• Search report from an Advocate indicating a clear title for the last fifteen years as per the land records; and
• Approved building plans in case of constructed property.

On completion of the post-sanction documentation the Disbursement procedure would commence subject to the other pre-disbursement conditions (mentioned above) being fulfilled.

Time taken at the Documentation Stage
The time taken at different stages of the Credit decision could be on delays on the part of the promoter and/or in-efficiencies on the part of the financial institution. However, the delays during the Post-Sanction Documentation are generally on account of poor homework by the entrepreneur.

In case of SMEs, quite often the documentation process requires 4-6 months for completion. This is mainly because of delay on the part of the entrepreneur in furnishing relevant documents and satisfying queries arising during scrutiny. In case of financing through the state financial institutions, in certain cases, the institution is also partly responsible, as these requirements are made known to the prospective borrower only subsequent to the Sanction as part of the Sanction conditions.

Time taken during the Documentation stage is clearly unproductive and if excessive could lead to the project assumptions undergoing a change affecting the viability of the project (and requiring a review prior to disbursement).
 
 

Application and Preliminary Scrutiny
Appraisal and Sanction
Disbursement and Monitoring
Post Implementation Review

We would look forward to receiving your feedback and suggestions on this module at services@indiamarkets.com