ANNEXURE (42) [Vide Rule 102] Rules for the scheme of extension of government guarantee to loans Offered by schedules banks to managements of private Aided secondary schools for construction of or Extension to their school buildings- SS CODE

 

ANNEXURE (42)

[Vide Rule 102]

Rules for the scheme of extension of government guarantee to loans

Offered by schedules banks to managements of private

Aided secondary schools for construction of or

Extension to their school buildings

 

1. Objective:

 

The objective of the scheme is to extend government guarantee to loans offered by scheduled banks to managements of private aided secondary schools for construction of or the extension to their school buildings.

 

2. Scope and eligibility:

 

An application for government guarantee will be entertained only for a loan offered by a scheduled bank for construction of or extension to a school building of an aided secondary school in existence for at least five years and managed by an educational institution registered under the Bombay public trust act, 1950.

 

3. Mode of submission of Application:

 

(i) When an institution applies to a scheduled bank for loan construction of or extension to its school building and intends to apply subsequently for government guarantee for such amount of loan as may be offered to it by the bank, the institution should initially endorse a copy of its application for bank loan to the education officer of the Zilla Parishad/ educational inspector, greater Bombay.

 

(ii) If the bank concerned informs the institution of its willingness to advance loan to it, the institution should apply for government guarantee to the loan offered, in the prescribed form appended to these rules, together with the documents listed below. The application for government of Maharashtra, education, employment and youth services department, mantralaya annexe,  Bombay 400 032 but should be submitted through the education officer of the zilla parishad/ educational inspector, greater Bombay, who should forward it with his remarks to the regional deputy director of education of the region for onward transmission, with his own remarks, to government.

 

Documents to be attached with the application:

 

(a) Certified copy of the certificate of registration and of the up-to-date declaration of the trust (i.e., the constitution of the institution);

 

(b) The letter or the certificate (in original) from the scheduled bank declaring its willingness to advance loan of a specified amount to the institution and for which guarantee is sought from government;

 

(c) Copies of annual report and audited statement of accounts together with auditor’s report thereon, for each of the three years preceding the year in which the application for government guarantee to the bank loan is made;

 

(d) A certified copy of the record of rights or extract of City Survey records of the loans on which construction of the proposed new school building or extension to the existing school building is proposed to be undertaken.

 

(e) Copy of the plans and estimates of the proposed construction work of the school building duly approved by chartered architects.

 

(f) A statement or certificate, duly supported by documentary evidence showing that the institution has collected on its own at least twenty-five per cent of the cost of the period proposed construction work of the school building.

 

4. Limit and Conditions of Government Guarantee:

 

(i) The maximum amount of bank loan for which government guarantee may be extended in an individual case shall not exceed Rs. 50,000 or the amount equal to fifty per cent of the cost of the proposed school building construction work, whichever is less.

 

(ii) Where the institution has not been also to collect in advance its full contribution towards the cost of the building (i.e., the cost of the building not covered by the bank loan), the bank should release the loan in two installments as under:

 

(a) Half of the amount of the loan should be released on production of satisfactory proof by the institution that it has collected its own further contribution equal to the said amount.

 

(b) The remaining half amount of the loan should be released on production of satisfactory proof by the institution that it has collected its own further contribution equal to the said amount.

 

(iii) The institution shall have to execute in favor of government an undertaking to the effect, inter alia, that:

 

(a) It will produce to government its records and accounts to prove its stability and soundness;

 

(b) Government shall have the right to conduct an inspection of its records and accounts at any time during the pendency of guarantee;

 

(c) In case of default in payment of the bank loan, it shall be open to government to recover from the institution, without prejudice to other remedies, the amount due as arrears of land revenue.

 

(iv) In addition to the undertaking mentioned in (ii) above, the institution shall have to execute in favor of government in the prescribed form a guarantee bond, indemnity bond, a deed of second mortgage, and/or such other documents as the government may prescribe from time to time.

 

(v) If the institution does not avail of the bank loan within a period of three months from the date of approval of government guarantee to such loan, the guarantee shall stand automatically terminated.

 

5. Guarantee fee:

 

A fee should be charged annually for the facility of government guarantee made available to the institution, at such rates as may be laid down by government from time to time.

 

6. Admissibility of rent for purposes of grant-in-aid:

 

Rent of the school buildings constructed out of bank loan guaranteed by government will be admitted for grant in accordance with the usual sanctioned rates in that behalf. The expenditure on repayment of the bank loan will not, however, be admissible for grant.

 

(G.R.E.S. and S.W.D. No. SSN. 1170/31184-W, dated 6^th January 1971).

 

Government is pleased to direct that:-

 

(1) The scheme in question will also be applicable for construction of hostel buildings attached to the aided secondary school, hostels for girls and hostels attached to technical institutions such as technical schools and I.T.Is. the hostels attached to technical institutions, hostels for girls and hostels in scheduled areas should be given priority in extending government guarantee to the loans advanced to them by the banks.

 

(2) The present limit of Rs. 50,000 of the bank loan for which government guarantee may be extended in any individual case should be raised to Rs. 2 lakhs or 50 per cent of the cost of the proposed school/ Hostel building construction work, whichever is less.

 

(3) The guarantee will be extended to the loans offered by both scheduled as well as urban co-operative banks.

 

(4) The condition of five years of existence for a recognized and state aided school, eligible for government guarantee, should be reduced to three years.

 

(5) The maximum amount up-to which guarantee can be sanctioned (for schools and hostels) in any financial year should not exceed Rs. 1 crore, out of which Rs. 10 lakhs should be earmarked for buildings of the hotels attached to secondary schools and Rs. 90 lakhs for secondary school building.

 

(G.R.E.D. No. SSN. 1171/71658-W, dated 20^th June 1973).

 

Form of application for government guarantee to loan offered by a schedule

Bank to an institution running an aided secondary school for construction

Of or extension to its school building

To

The secretary to the government of Maharashtra,

Education employment and youth services department,

Mantralaya, Annexe, 4^th floor,

Bombay 400 032.

[Submitted through the education officer, __________________________

                                                                        (Name of the Zilla Parishad)

Zilla Parishad/ Educational Inspector, greater Bombay, Bombay]

 

Sir,

I/we ____________________________________________________________

            [Name (s) and designation (s) or office (s) held under the institution]

__________________________________________________________________

Hereby apply for government guarantee to a loan of Rs. ___________________________

                                                                                                (amount in numbers)

(Rupees _______________________________________________________________ )

                        (Amount in words)

Offered to us by _______________________________________________________

                                    (Name and address of the scheduled bank)

________________________ for construction of/extension to the

building for ____________________________________

                        (Name of the school)

At  ______________________________________________

            (Name of place of location of school)

District ___________________________

                        (Name of the district)

 

I/we have gone through the rules for the scheme of extension of government guarantee to loans offered by scheduled banks to managements of private aided secondary schools for construction of or extension of their school buildings, approved by government and set out in appendix A attached to government resolution, education, sports and social welfare department, no. SSN. 1170/31184-W, dated 6^th January 1971 and undertake strictly to abide by them.

 

I/we furnish below the required particulars to enable government to consider this application. I/we certify that they are true and correct tro the best of my/our knowledge. I/we attach the prescribed documents herewith.

1. Name of the institution (i.e. the public trust

Managing the school for the building of which

Loan has been sought)

 

2. When was the institution registered under the

Bombay public trust act, 1950? (A certified

Copy of the certificate of registration and

Of the up-to-date declaration of the trust,

I.e. of the constitution of the institution

Should be attached. A copy of the annual

Report and audited statement of accounts

Together with the auditor’s report thereon,

For each of the three preceding years should

Also be attached).

 

3. Name of the secondary school (for the building

Of which the loan has been offered by the

Bank) and its location, and the year in which

It was started.

 

4. The standards which the school is recognized

To teach and the present strength of pupils

In each of the standards as also the total

Number of pupils in the school.

 

5. Whether the school is held at present in rented

Premises or its own premise? Give brief

Particulars of the present accommodation of

The school (such as total number of rooms,

Area, etc.)

 

6. Name of the scheduled bank which has

Offered the loan and the amount of loan for

Which government guarantee is sought (The

Letter or the certificate from the scheduled

Bank concerned offering a specific amount

Of loan should be attached in original).

 

7. Particulars of land, building and such other

Fixed assets mortgaged by the institution to

The bank as security for loan and the estimated

Value of each such item of security.

 

8. The purpose for which the bank loan has

Been offered, i.e. whether for construction

Of new building or extension of the existing

Building (A copy of the plans and estimates of

The construction work approved by charted

Architects should be attached.)

 

9. Whether the institution holds clear title to

The land on which the building is proposed to

Be constructed (A certified copy of the record

Of rights or of the extract from city survey

Records should be attached).

 

10. How does the institutions propose to meet

The residual cost of construction ? (mention

The amount which the institution has already

Collected on its own as reserve fund, building

Fund, etc., and where it is deposited. Docu-

Mentary evidence for the amount actually

Collected for the construction work should

Be adduced).

 

11. Whether any building grant and/or loan by

Government in the past has been sanctioned

To the institution and if so, how much? If the

Institution was sanctioned any loan by government

What is the amount of loan and interest

Still remaining to be repaid? Has the institution

Paid the due installments of loan and

Interest regularly in the past?

 

12. Whether the institution is prepared to pay

Annually the prescribed guarantee fee if the

Government decides to extend guarantee to the

Loan offered to it by the bank?

 

13. Whether the institution is ready to execute

Guarantee bond, indemnity bond, and mortgage

Deed, and such other documents as the

Government may prescribe as a condition

Precedent to the extension of guarantee

And also abide by other conditions, if any,

Which the government may deem fit to

Impose? If so, name (s) and designation (s)

Or office (s) held off the persons (s)

Or body (i.e. committee, etc.) competent

To sign these documents on behalf of the

Institution may please be specified.

 

Yours faithfully,

Name:

Designation or office held

Under the institution:                                                                                                                                                              (Signature of Applicant)

 

Name:

Designation or office held

Under the institution:                                                                                                                                                              (Signature of Applicant)