Channel Financing Scheme Policy

Topics: Finance, Credit card, Money Pages: 5 (1224 words) Published: July 26, 2011

A structured program to ease payments from Dealers of DAIPL by providing them with a flexible funding facility.

To be used by dealers exclusively for payments to DAIPL towards purchases of goods from DAIPL. Note – This arrangement can not be used for any other purpose(s) other than purchase of goods from DAIPL and payment towards that purchase.

Applicability Clause
1.Dealers who fulfilled following criteria will be eligible for availing facility under this scheme; a.General Clause
i.signed dealer agreement with DAIPL
ii.deposited security deposit with DAIPL
iii.completed minimum 6 months of dealership with DAIPL
iv.have minimum business experience of 3 years in air conditioning industry default in payment to DAIPL during preceding 1 year not under defaulter’s list of RBI/ ECGC
vii.Neither of director/ promoter etc. of dealer is in arrear/ default of any facilities availed from YES BANK LTD. / group companies of YES BANK LTD. viii.non of the facilities from YES BANK LTD. / group companies of YES BANK LTD. have been restructured ix.Should not have one-time settlement with YES BANK LTD. / group companies of YES BANK LTD. not a sick/ potentially sick/ referred to BIFR

b.Financial Clause
i.Have minimum turnover of Rs.20 million as turnover in last audited financial. ii.Positive PAT (Profit after Tax) and Net Worth for the last 2 years. iii.TOL/ATNW should be less than 4.

2.Facility will be provided only when recommended by DAIPL and approved by YES BANK LTD. bank after completion of internal due diligence of YES BANK LTD.

Note –
1.DAIPL and/or YES BANK LTD. Bank reserve(s) the right to add/change/delete any of the clause(s) at their own discretion at any time without assigning any reason(s). Limit Assessment of Dealers
1.Overall limit of each dealer shall be ‘limits as recommended by DAIPL’.

Cash discount
1.All billings to dealers under this scheme shall attract a cash discount as per their category based on achievement of turnover (As per Daikin’s dealer credit policy). 2.This amount shall be adjusted in the invoice value. DAIPL shall not issue any credit note or cheque towards cash discount amount. 3.Change in cash discount (upward/ downward) is dependant upon decision of management. This has no relationship on change of IBAR/ interest rate/ processing fee/ any other fee charged by YES BANK LTD.

Likely Benefits to dealers
Following benefits can be derived by dealers from this scheme; 1.Unsecured facility
2.Better cash flows and liquidity
3.Reduced turnaround time
4.Competitive financing compared to other options
5.Minimal impact on working capital arrangement
6.Opportunity to expand banking relationship
7.Instant income = Cash discount ‘minus’ interest
8.60 days credit period

Billing Clause
1.An eligible dealer may opt for billing through channel financing or use DAIPL’s credit facility. A dealer can not enjoy channel financing and DAIPL’s credit facility simultaneously. 2.An eligible dealer can start using DAIPL’s credit facility only when he has paid whole of principal amount, interest amount and any other dues to YES BANK LTD. and submit proof of the same to DAIPL. 3.DAIPL shall not bill to dealer, who has opted for channel financing, on cash advance basis or based on its own credit policy. 4.In case a dealer wants to opt out of channel financing and wants to be under DAIPL’s credit policy, he shall be included under DAIPL’s credit policy only when all dues (principal + interest amount) are paid by the dealer to YES BANK LTD.

Facility arrangement
1.Maximum normal overall limit (called “Normal Limit”) available to each dealer shall not exceed Rs.5millions. 2.Credit limit (called “Sanctioned Limit”) and credit days would be decided by YES BANK LTD. after doing field evaluation and due diligence of each dealer but can not exceed the credit amount allowed as per...
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