Section 8 in The Short Term Loan Scheme for Modernisation of Sugar Factories For Simultaneous Processing of Raw Sugar with Crushing of Sugar Cane
8.
(1)The sugar factory shall give either a bank guarantee or a first charge on its assets on pari passu basis failing which second exclusive charge on its assets, as security for the loan depending upon the fixed assets coverage ratio of the sugar factory existing on the date of last balance sheet.(2)The second exclusive charge shall be permissible only if the fixed assets coverage ratio is 1.5 or more, first charge pari passu shall be acceptable from factories having fixed assets coverage ratio of or above 1.33 and if the fixed assets coverage ratio is below 1.33, the sugar factory concerned shaH give bank guarantee.(3)Subject to the fixed assets coverage ratio benchmark, a sugar factory, if it so desires, may be permitted to withdraw the bank guarantee furnished by it at the time of taking loan, against submission of security in the form of a charge on its assets.
