Common use of Release of Loan Clause in Contracts

Release of Loan. 2.1 The release of funds with respect to the sanctioned projects, shall be made by NABARD on the basis of application in prescribed format submitted by the Finance Department (nodal department) of the State Government after satisfactory completion of all the formalities. Along with each drawal application State Govt. shall also furnish Utilization Certificate in respect of the entire amount of previous loan installment released. 2.2 Borrowings of State Governments under MIF shall be governed by Article 293 (3) of the Constitution of India under which GoI determines its borrowing powers from the market and financial institutions during a financial year and Article 293 (1), under which limits are fixed by the State Legislature for borrowing. Disbursements shall be made only after receipt of Borrowing Power approval from GoI under Article 293 (3) of Constitution of India by the State Government. 2.3 NABARD shall disburse the loan amount based on submission of a statement of expenditure incurred by the State Govt. and due recommendation from MoA&FW, GoI. The loan to be so disbursed shall be restricted to the amount of the statement of expenditure and recommendation for release of loans by MoA&FW. Drawal application will be submitted based on actual expenditure incurred even ahead of phasing given in the sanction. 2.4 The State Government shall submit its tentative requirement of funds to NABARD one month prior to the expected date of disbursement. NABARD shall disburse the requisitioned amount within 15 days of getting drawal application, complete in all respects along with all necessary documents from the State Govt. and due recommendation from MoA&FW, GoI. In order to raise resources from the market through issuance of bonds with minimum lot size, the demands received from the States shall be clubbed by NABARD till the minimum amount of Rs. 500 cr is reached and the period of 15 days may be reckoned from the date on which such amount is reached. 2.5 The State Government would make adequate budgetary provision annually for repayment of loan under MIF and interest thereon. 2.6 Each disbursement would be treated as a separate loan and would have prescribed repayment schedule. 2.7 In the event that State Government after giving one month’s notice, does not avail funds raised by NABARD upon drawal request by the State Government, it shall be liable for financial loss suffered by NABARD in this process. This loss will be determined based on the difference between interest rate on such borrowings by NABARD and the prevailing reverse repo rate for the period such borrowing remains unutilized under this scheme.

Release of Loan. 2.1 8.1 The release of funds with respect to the sanctioned projects, shall be made by NABARD on the basis of application in prescribed format submitted by the Finance Department (nodal department) of the State Government after satisfactory completion of all the documentation formalities. Along with each drawal application application, State Govt. shall also furnish Utilization Certificate in respect also 8.2 The Borrowings of the entire amount of previous loan installment released. 2.2 Borrowings of State Governments under MIF shall be governed by Article 293 (3) of the Constitution of India under which GoI determines its the States Governments’ borrowing powers from the market and financial institutions during a the financial year and Article 293 (1), under which borrowing limits are fixed by the State Legislature for borrowingLegislature. Disbursements shall be made only after receipt of Borrowing Power approval from GoI under Article 293 (3) of Constitution of India by the State Government. 2.3 8.3 NABARD shall disburse the loan amount based on submission of a statement of expenditure incurred by the State Govt. and due recommendation from MoA&FW, GoI. The loan to be so disbursed shall be restricted to the amount of the statement of expenditure and recommendation for release of loans by MoA&FW. Drawal application will be submitted based on actual expenditure incurred even ahead of phasing given in the sanction. 2.4 8.4 The State Government shall submit its tentative requirement of funds to NABARD one month prior to the expected date of disbursement. NABARD shall endeavour to disburse the requisitioned amount within 15 days of getting drawal application, complete in all respects along with all necessary documents from the State Govt. and due recommendation from MoA&FW, GoI. In order to raise resources from the market through issuance of bonds with minimum lot size, the demands received from the States shall be clubbed by NABARD till the minimum amount of Rs. 500 cr is reached and the period of 15 days may be reckoned from the date on which such amount is reached. 2.5 8.5 The State Government would make adequate budgetary provision annually for repayment of loan loans under MIF and interest thereon. 2.6 8.6 Each disbursement would be treated as a separate loan and would have prescribed repayment schedule. 2.7 8.7 In the event that State Government after giving one month’s noticenotice and the drawal request, does not avail the loan out of funds raised by NABARD upon drawal request by the State GovernmentNABARD, it shall be liable for financial loss suffered by NABARD in this process. This loss will be determined based on the difference between interest rate on such borrowings by NABARD and the prevailing reverse repo rate for the period such borrowing remains unutilized under this scheme.