Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Wednesday, April 1, 2020

Letter to Bankers for Deferment of Payment During Covid-19

To <bankers>
Sub: Deferred Payment for Loan ID / CC Facility No. _______

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Dear ______ Bank Team,

This has reference to your bank's policy honoring the regulatory measures and relief announced by the RBI vide Circular DOR.No.BP.BC.47/21.04.048/2019-20 dated 27-Mar-2020 in view of the Covid-19 outbreak.

We would like to take the benefit of the following relief measures for our term loan and other short term working capital facilities, including but not limited to cash credit limits, buyer's credit, letters of credit, etc. sanctioned vide letter dated ________, and all other borrowing facilities taken by our company from your bank.

1. Term Loan Moratorium: Moratorium of three months on payment of all term loan instalments falling due up to 30-Jun-2020 for all term loans. Kindly do not deduct EMIs from our accounts till the said date.

2. Defer Interest on CC/ WCDL/ BC/ LC, etc: Kindly defer the recovery of interest applied in respect of all working capital facilities during the period from 01-Mar-2020 up to 30-Jun-2020 in respect of facilities sanctioned in the form of cash credit / over-draft (CC/OD).

3. Expansion of Drawing Power: Kindly recompute our drawing power. Let us know the additional amount that we can overdraw from our already sanctioned facilities and we would also request you to let the overdrawn amount be fully utilized up to 30-Jun-2020.

4. Reduction in Margin/Liberal Expansion of Facility: Kindly also expand our borrowing facility in the available limits for Cash Credit or WCDL, which is free for us to use in any way to meet current working capital requirements. We would request you to not appropriate them in the proportion of the various facilities such as for Buyer's Credit, Bill Discounting, Letters of Credit, etc. Instead, please allow the expanded drawing power in CC/WCDL only.

5. Reduction in Lending Rates of Interest: Since the RBI has reduced its rates, we would request you to pass on the benefit to us by suitably reducing the borrowing rates on our term loans and other facilities with immediate effect. We hope correlated relief will be offered in the form of floating rates to us immediately.

6. Credit Card Dues: The same benefits may also be extended to our corporate credit cards, the repayment for due amounts on which shall be done after the abovementioned moratorium period on other facilities.

7. No Penal Interest: Please ensure no penal interest for delay is charged to our accounts. We shall try and repay the outstanding amounts as soon as our business operations are back in running after the lockdown is lifted and we can resume work.

8. Maintaining our Asset Classification and Credit Rating: Kindly maintain our asset classification with the bank as standard assets as we have so far not defaulted on any of our debt servicing payments, and would continue servicing our debts timely, soon after 30th June, 2020.

9. Our Eligibility for Relief: We are eligible for the abovementioned relief measures due to the following reasons:
(i) rescheduling of orders
(ii) shutdown of work place
(iii) non-availability of manpower and transportation to complete current orders
(iv) non-realization of debtors due to lockdown on the nation
(v) we are not under IBC proceedings
(vi) we are classified as a standard asset, servicing our loan repayments on time

10. Communication for Honoring Payments: In the unforeseen case in the next two months when the account balance limits maybe low and the facilities fully overdrawn, we would request you to speak with the undersigned before dishonoring any cheque presented for payment, so that the company can arrange for the required funds immediately to ensure no hardship to any vendors to whom post-dated cheques had been issued.

We shall be happy to provide any documentation in this regard as soon as the lockdown is lifted.

Please consider our request to be granted with immediate effect. Kindly acknowledge receipt.

Thanking you and wishing safety on you all.

Sincerely,

______________

Director
____________ Ltd.

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