With the growth in the automobile sales and enhance retails financing options, dealers of these automobiles need

working capital financing to fund inventory to push sales. We offer financing to vehicle dealers for purchase of vehicles from manufactures via this 'Dealer Finance' facility. Nature: The facility is in the nature of short-term overdraft. The facility is for up to a maximum tenor of 45 days, with repayments being made as and when specific vehicles have been sold. o The facility would be secured by hypothecation of specific vehicles financed by bank. Credit enhancement may be by mortgage of residential or/ and business properties of dealer. Process Flow: o o

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Channel Finance
first stage dealers get finance for purchase of commodities

Learn more about the attractive Channel Finance Scheme from TMB.

This scheme is very popular among the developed and fast developing cities and towns. Under this scheme the bank funds the purchase of commodities from manufacturers / stockists by first

stage dealers. It is very popular among all the white goods showrooms and large dealers who regularly buy from manufacturers and sell to customers.

Salient Features:
It is meant for financing sale of equipments, vehicles and other commodities in the hands of the first stage Distributor / Dealer. This finance is applicable only to sales against sight-payment (i.e. not on credit terms) at the hands of first stage Distributor / Dealer. It is a sort of transit finance in the sense that the goods may be in transit when finance request is made under the scheme. The manufacturer is funded for his sales (supply of equipments, vehicles, commodities etc) whereas the first stage Distributor / Dealer is financed for his purchase through the TMB Channel Finance.
Purpose To finance the purchase of commodities from manufacturer / stockists for first stage dealers only. Eligible Commodities

Any commodity supplied directly by, either the Manufacturer or the Stockist (who procures commodities from the manufacturers / imports from abroad). The commodity should be that of a reputed brand. The commodity should be fast moving consumer goods category. Examples: Vehicles, Petroleum products, Biscuits / Confectioneries, Edible oils, Fast Moving Consumer Goods (FMCG), etc., all of reputed brands. (The underlying feature is, goods are normally not sold on credit terms by the manufacturer / stockist).

Elligible Borrower

First stage dealer in the above commodities. The borrower should be rated Good and above according to our credit rating exercise. Initially for a period upto 6 months and until reviewed by our Board, the scheme may be restricted to the existing customers only.

Primary Security Commodities procured from the manufacturer/stockist under each of the invoice (Trust period: Date of invoice to date of receipt at the warehouse of the borrower). The invoice should bear particulars of our Banks charge over the commodities and Book-Debts with a cover period of maximum 90 days (applicable only for select commodities which are sold not to the actual user but to another sub-dealer). The quantum / value of collateral need not be the deciding factor for credit decision. Collateral Security Any quantum of legally enforceable asset / property (movable / immovable) according to the discretion of the sanctioning authority for each borrower and from time to time. Additionally Personal Guarantee of any partner(s) / director(s) / according to the discretion of the sanctioning authority for each borrower and from time to time. Margin 0%. Style of Credit One Demand loan for each lot consisting of one or more invoices (i.e.) there can be multiple demand loans with aggregate balance less than the over all sanctioned credit limit. Rate of Interest

Commodity will be a fixed asset to actual end user (e.g. Motor Vehicle) 0-30 days from date of Invoice - BR + 2.75% (13.75% p.a.). 31-45 days from date of Invoice - BR + 5.75% (16.75% p.a.). 46-90 days from date of Invoice - BR + 10.75% (21.75% p.a.). 91 days from date of Invoice to till recovery - BR + 12.75% (23.75% p.a.). Commodity will be a current asset / consumables to the actual user or buyer (eg. Biscuits, Petroleum Products, edible oils etc.) 0-30 days from date of Invoice - BR + 3.75% (14.75% p.a.). 31-45 days from date of Invoice - BR + 5.75% (16.75% p.a.). 46-90 days from date of Invoice - BR + 10.75% (21.75% p.a.). 91 days from date of Invoice to till recovery - BR + 12.75% (23.75% p.a.). Current Base Rate for Lending (BR) is 11.00% p.a.

Processing Charges

Rs. 400 per lakh or fraction thereof to be collected upfront at the time of

sanction intimation. Quantum of Finance Pre-sanction appraisal should quantify separate limits under (a) TMB Channel Finance and (b) Other style of credit within the overall MPBF ascertained. Alternatively advances under this style of credit will necessitate reduction in existing quantum of working capital limits against stocks and / or receivables. The existing working capital limits (against stock) can be used to liquidate fully or partly the balance outstanding in the Channel Finance. Documentation Simple Documentation as per Bank Norms.

This scheme is unique in the following respects:

The borrower is rewarded with 100% finance. The rate of interest for the loan is directly related to the loan period. In other words, shorter the loan period lower is the rate of interest and higher the loan period, higher is the rate of interest.

The rate of interest for the loan is inversely related to the loan amount. In other words, higher the loan amount lower is the rate of interest and lower the loan amount, higher is the rate of interest.

Borrowers with a credit rating of Good and above get enhanced credit at competitive rate of interest.

All the above Terms and Conditions are subject to change and sanctioning of the loans is at the sole discretion of the Bank. Service Tax on All Service Charges extra wherever applicable.

The Sell Side - Supply Chain of Top Indian Companies comprises of the Corporate supplying to Channel Partners for

further sale to customers. Corporates have longstanding relationship with these Channel Partners and also constitute a major proportion of their overall business turnover. IndusInd Bank provides working capital finance to the Channel Partners of Top Corporates through its Channel Finance Product. Under this solution, IndusInd can structure tailor-made solutions and offer the financing option to Channel Partners based on "Partnership Approach" with Corporate. A Simplified Channel Finance solution is as follows: Step1: Supply of goods from Corporate to Channel Partner. Step2: Advise to IndusInd Bank to make payment for the purchase. Step3: Payment by IndusInd for goods purchased by Channel Partner. Step4: Repayment by Channel Partner to IndusInd Bank as per facility term Channel Finance Benefits to Corporate: Assured availability of finance to their Channel Partner's at lower than current cost. Corporate can use this as a Marketing tool and strengthen their relationship / reward loyalty of the Channel Partners. Release of funds from the balance sheet resulting in improvement in financial ratios. Conversion of balance sheet item to an off balance sheet liability.

Ability to introduce payment discipline with their Channel Partners. Channel Finance Benefits to Channel Partners: Steady and cheaper source of working capital financing. Channel Partners can increase sales through higher purchasing power. Clean facility up to certain limits. Simplicity of documentation and approval procedures. Channel Partners may be able to increase profitability by availing of Cash discounts from Corporate.