GOVERNMENT OF KERALA

Abstract

Industries -Cluster Development Activities -Providing Margin Money Loan assistance to Individual participating units -Amendment -Orders issued.

INDUSTRIES (B) DEPARTMENT

G.O. (MS)No.84/2004/ID                                                         Dated, Thiruvananthapuram, 27.07.2004

ORDER

The Director of Industries and Commerce had forwarded a proposal for amending the Scheme of Margin Money Loan approved as per G.O read as first paper above. Government have examined the proposal in detail and are pleased to amend the G.O as shown in the annexure to this order. The amendments will take effect from the date of issue of this order

By Order of the Governor    
(Sd/- )             
JOHN MATHAI        
PRINCIPAL SECRETARY TO GOVT

Amendments

1. After Rule 1 the following will be added as rule 1 (a)

Margin Money Loan under the scheme will also be available to existing individual SSI units who are members of a Cluster Group/Common Corporate Entity/Consortium/Company organised under the Industrial Cluster Development Programme being implemented as per G.O(Rt)NO.652/2003/ID dated 4.7.2003. Such existing industrial units will be eligible for margin money loan assistance under this scheme for raising their equity/share investment/margin insisted by the Bank or Financial institution from the Common Cluster Entity or Cluster Company or the participating individual member unit for the purpose of' creating or establishing Common Facility Centres, Quality Testing Facilities or other industry related activities including marketing facilities deemed fit and essential to the development of the cluster. However, the applicant should not be a defaulter of any pervious loan availed under any margin money loan scheme of the Industries Department as on the date of application.

(2) After Rule 3 the following will be added as rule 3 { a)

Rs.2.5 lakhs (Rupees Two lakhs and fifty thousand only) will be the maximum limit of margin money Loan to each individual member units of the Common Cluster Entity for participating in cluster activities herein above described under rule l (a). This margin money loan assistance shall be limited to 50% of the equity/share contribution insisted by the Common Cluster Entity and as endorsed by the Bank/Financial Institution for the purpose for which loan has been sanctioned by the said Bank/Financial Institution. The General Manager, District Industries Centre concerned shall be the loan sanctioning authority under the scheme.

(3 ) Rule 9 will be substituted with the following Rule

The Margin Money loan sanctioned under this revised scheme shall carry an interest of 6% per annum. Penal interest on defaulted payment will be charged as provided in Rule 11. All payments made by the loanee will first be adjusted against penal interest on defaulted principal and/or interest, if any, and then against principal charged as provided in Rule 11.

(4) The following rule will be added after rule 13 as rule 13(a)

No-collateral security or charge on assets of the CCE or Cluster Group/Company or Consortium or of the applicant unit during the pendency of loan to the financial institutions or bank. is required for the Margin Money loan. But the Government shall have a charge on the assets of the "Common Cluster Entity or Cluster Group/Company/Consortium created out of the loan once the term loan liabilities are serviced. The Financing institution will advise the Director of Industries & Commerce in writing of their intention of releasing the charges created in their favour in case of full repayment or of taking over the assets of the CCE or Consortium or Company or the loanee in case of default so as to ensure that the assets are not disposed of with out the knowledge of the Department. In cases where margin money loan assistance is only for working capital requirements of the CCE/Cluster Consortium/Company, the Government shall have all the charges over all those assets and securities, primal-y or collateral, hypothecated or pledged by the loanees or CCE/Cluster Consortium/Company to the Financing Institution for availing the working capital loan, once the loans of the Financing Institution are serviced. In case of default by the loanees of the dues under Margin Money loan the entire amount outstanding shall be liable to be recovered as if it were arrears of land Revenue under the provisions of the Kerala Revenue Recovery Act 1968 from the loanees or their legal heirs and in such other manner as Government may deem fit. (This will be incorporated as an additional clause in the agreement executed by the loanees ).

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