Commercial & Trade Finance

Corporate Banking >> Commercial & Trade Finance

Commercial & Trade Finance

The Islamic Republic of Afghanistan with the end of long run internal conflict, is presently under a vibrant socio-economic reconstruction phase. This has opened up many avenues for Trading, Construction, Manufacturing, Service and Import activities offering a big scope and potential for various Business Activities in these sectors. Realizing the National Importance of Credit deployment in the above segments of the business in order to help the upcoming entrepreneurs; Maiwand Bank has come up with various Credit Facilities for promoting commercial activities in the country.

Maiwand Bank extends credit facilities to meet the entire range of fund requirements of any lawfully permitted commercial activities. The range of assistance is for :

Fund Based Facilities

1. Procurement of Capital goods like Equipment, Machinery, Furniture, Factory Premises, Vehicles etc.
2. Procurement of Inventories, Raw Materials, Stocks, Spares etc.
3. Supporting supply chains, production & marketing operations, internal cash flows.


The major facilities being offered are in the following nature :

Overdraft / Cash Credit

1.Cost Saving - interest charged funds availed on daily product basis.
2. Revolving Credit through out the business cycle.
3. Renewal / Roll over after the expiry date.
4. Competitive Rate of Interest.


Demand Loans

1. Bridges the Fund Gap in business for shorter periods.
2. Easy and Fast Processing.
3. Interest calculated on daily product basis.
4. Renewal / Roll over after the expiry date.
5. Competitive Rate of Interest.


Term Loans

1. Need based finance on easy terms.
2. Moratorium & Repayment Period based on Fund Flows.
3. Interest calculated on daily product basis.
4. Competitive Rate of Interest.


NON-Fund Based Facilities :

Bank, through its Letter of commitment by way of Guarantees and Letter of Credits on specified Term and Conditions; will assure the Beneficiary on behalf of the Applicant about the fulfillment of contracted obligations by the Applicant.


Bank Guarantee

1. Need based finance on easy terms.
2. Release of Mobilization Funds / Advance Payments by Beneficiary to the contractor.


Letter of Credit

1. Guarantee to the Buyer about assured Supply of Goods.
2. Better Negotiability of the Purchase Terms
Maiwand Bank is in the process of finalizing the Personal & Retail Banking Products and same will be announced shortly.

Term Loans

Corporate Banking >> Term Loans

Loan facilities provided to the borrowers for over a period of one year & above and are repayable in scheduled installments along with the interest, as mutually agreed up on will be classified as Term loans.

Term Loans are extended for Procurement of Capital goods like Equipment, Machinery, Furniture, Show Room, Factory Premises, Vehicles etc.
Any Commercially viable and Lawfully permitted activity either Industrial or Non Industrial is eligible for Term Finance Entrepreneur having valid statutory / business license, experience / qualification in the line of activity is eligible.
Need based finance will be considered by the Bank on individual assessment of the proposals. The assessment will be made on Personal investigation, Confidential reports from Market, Other Banks, Chamber of Commerce or any other controlling agency of the business concerned; The balance sheet, Trading account, Profit and loss account; Memorandum and articles of association if any, and other relevant documents; The age / type / average balances / present balance / nature of operations during the last six months, of the account with us etc.

Generally prescribed Margin is 25%. However, it is decided on case to case basis.
Along with prescribed Application, the applicant to submit Financial Statements like Project Report along with the Feasibility Report, Balance Sheet, Trading A/c, PL Account etc., - audited for past 2 years & projections for next two years.
Rate of Interest may range between 15% to 25% and will be assessed on case to case basis. Interest will be calculated on daily product basis and will be applied at the end of every month.


Facilities will be secured by way of

(i) hypothecation / pledge of stocks / goods / machinery / equipment etc.
or
(ii) Mortgage / Creation of charge on suitable Immovable Properties.

Moratorium Period is allowed on the basis of Fund Flows of the Project.
Repayment in Monthly / Quarterly / Half Yearly Installments in not exceeding 3 years.
Repayment Schedule will be fixed on the basis of Cash Flows, Repayment Capacity & Debt Service Coverage Ratio.

Demand Loans

Corporate Banking >> Demand Loans

Time Deposit/Term Deposit/Fixed Deposit : These types of deposit accounts are aimed to resource the long time funds from the public, who may not have immediate cash requirements. These deposits are accepted for a certain fixed time or term which will be repayable after the expiry of the period so fixed. Since these deposits remain in the bank for a longer time than the demand deposits for the purpose of long term investments, Maiwand bank offers attractive interest rates with more safety and security of the customer's funds.

1. Extended for one time and are repayable on demand as a bullet payment.
2. Interest is payable on monthly basis.
3. Short term in nature generally for a period not exceeding to one year,
4. Will be provided against the



1. (i) Primary securities in the form of

(a) pledge or hypothecation of the Current Assets / Bank Deposits.

or

(b) against personal or third party guarantees of a reputed customers.


2. (ii) Collateral security in the form of mortgage or creation of charge on immovable properties.

Demand Loan against pledge of Banks Own Deposits will be allowed against receipt of Simple Demand Loan Application Form and on Pledging the duly discharged Original Deposit receipt of the Bank.
Demand Loan for Commercial Activity on the basis of Pledge / Hypothecation of Stocks, Machinery and any Collateral Security will be assessed as explained under Overdraft Facility on similar terms and conditions.
Margin 10% to 25% & Rate of Interest 15% to 25% on case to case basis assessment.
Repayment 3 to 12 months.

Bank Guarantee

Corporate Banking >> Bank Guarantee

Bank Guarantee is the commitment given by the banker on behalf of the customer in favor of a third party (Beneficiary) promising to perform or discharge the liability of the principal in case of his failure to perform the contract.
In the present open market scenario prevailing in the country, the Construction, Real Estate and Logistics / Supplies sectors are booming up day by day. This necessitates the Contractors and Suppliers to have a greater leverage and liquidity of their working funds for deploying the same in a more profitable manner. Therefore, Maiwand Bank offers the following three types of Letters of Guarantees on behalf of their customers.


We are offering following three types of guarantees

1. Bid Bond Guarantee
2. Performance Guarantee
3. Financial & Advance Payment Guarantee


Bank Guarantees are issued on fulfilling the following criteria :

1. Prescribed Application along with underlying Contract with the Beneficiary or Bid Notification, as the case may be.
2. Statutory License from competent authority (AISA / MOC / MOI) etc.
3. Audited Financials / Business Plans.
4. Upfront & 100% Cash Margin. However, lower cash margins can be considered subject to provision of suitable collateral security and its assessment will be done on case to case basis.
5. Upfront Commission $10 / quarter is charged, if the facility is backed by 100% Cash Margin. In other cases, it is determined on the basis of available cash margin and value of the collateral security.
6. Bank Guarantee is issued for a maximum period of one year and on expiry of the same, the Bank is not liable to the beneficiary, in any manner.
7. Cash Margin / Collateral Security held with the Bank will be returned to the customer only on returning the Original Bank Guarantee

Letter Of Credit

Corporate Banking >> Letter Of Credit

A letter of credit is a written instrument, issued at the request of a buyer (applicant) in favor of the seller (beneficiary) undertaking, to honor the documents or drafts drawn by the seller in accordance with the terms and conditions stipulated in the credit, within a specified time. Letter of Credit one of the Strong facility available under Trade Finance, especially for Importers. This facilitates the Importer to negotiate the deal with better terms and conditions and enables him to conduct the business without locking his own funds. To help the Importers, Maiwand offers the Foreign as well as Inland Letter of Credit. However, only Sight LCs will be opened & no Usance LCs will be issued.


Letter of Credit are issued on fulfilling the following criteria :

1. Prescribed Application along with Confirmed Contract / Performa Invoice.
2. Statutory License from competent authority (AISA / MOC / MOI / Customs Dept) etc. Audited Financials/ Business Plans.
3. Upfront & 100% Cash Margin. However, lower cash margins can be considered subject to provision of suitable collateral security and its assessment will be done on case to case basis.
4. Upfront Commission @ 0.30% of LC amount for 1st quarter and @ 0.25% of LC amount for subsequent quarters subject to a minimum commission of $ 300.
5. Cash Margin / Collateral Security held with the Bank will be returned to the customer only on completion of the transaction under LC.

Overdraft/Cash Credit

Corporate Banking >> Overdraft/Cash Credit

1. Facilitates the Customer to avail the pre-determined credit limit as per the business requirements.
2. Available in the form of revolving credit for one year, which can be renewed / enhanced based on performance.
3. Running account, where the customer is allowed to operate within the limit prescribed as per convenience and requirement.
4. The amount of Overdraft limit will be decided based on the nature of the business, value of security and the margin provided by the borrower. Entrepreneur having valid statutory / business license, experience / qualification in the line of activity is eligible.
5. Based finance will be considered by the Bank on individual assessment of the proposals. The assessment will be made on Personal investigation, Confidential reports from Market, Other Banks, Chamber of Commerce or any other controlling agency of the business concerned; The balance sheet, Trading account, Profit and loss account Memorandum and articles of association if any, and other relevant documents; The age / type / average balances / present balance / nature of operations during the last six months, of the account with us etc.
6. Generally prescribed Margin is 25%. However, it is decided on case to case basis.
7. Along with prescribed Application, the applicant to submit Financial Statements like Balance Sheet,Trading A/c, P&L Account etc., - audited for past 2 years & projections for next two years.
8. Rate of Interest may range between 15% to 25% and will be assessed on case to case basis. Interest will be calculated on daily product basis and will be applied at the end of every month.
9. Facilities will be secured by way of: hypothecation / pledge of stocks / goods / machinery / equipment etc. And/or Mortgage / Creation of charge on suitable Immovable Properties.

Service Charges

Corporate Banking >> Service Charges

Products & Services

Charges in USD/EURO/GBP

Charges in Afghani

1.International outward fund transfer
USD/ Euro/ GBP transfer
- Commercial purposes
- Upto USD 40,000 or equivalent USD 100 NA
- More than USD 40,000 or equivalent 0.25% of the amount remitted NA
- Personal purposes upto USD 15000 USD 50 NA
- Personal purposes more than USD 15000 USD 100 NA
INR transfer
- Commercial purposes AS FOR USD REMITTANCE NA
- Personal purposes USD 10
2.International inward transfers
All currencies 15 GBP/EURO/USD NA
3.Follow up swift message
USD 20 Afn 1000
4.Domestic fund transfers
Within the bank NIL NIL
Through ACSS
- For USD auctions NA Afn 1000
- For other purposes USD 40 per USD 100,000 after two days of deposit USD 40 for any amount 1000
5.Cheque collection through clearing house NIL NIL
Charges for cheque returning USD 10 +other banks charges Afn 500+other banks charges
Inward documentary bills for collection 0.25% (min USD 50)+ courier charges 0.25% (min Afn 2500)+ courier charges
6.Letter of Credit
Imports
- Issuance 0.30% per qtr min USD 300 NA
- Processing of bills under LC 0.15% Min USD 50 NA
- Revalidation 0.30% NA
- Amendment USD 50 per amendment NA
- Confirmation Actuals of confirming bank NA
Exports
- Advising USD 100 NA
- Amendment USD 50 NA
- Negotiation 0.25% Min USD 200 NA
- Confirmation 0.25% Min USD 201 NA
- Sending of LC USD 50+ courier charges NA
- Collection 0.15%+ courier charges NA
7.Bank guarantee
Issuance charges per quarter
- 100% margin USD 20 per quarter Afn 1200 per quarter
- Above 70% to less than 100% margin 0.35% per quarter 0.35% per quarter
- Above 50% to 70% margin 0.60% per quarter 0.60% per quarter
- Above 25% to 50% margin 0.75% per quarter 0.75% per quarter
- 25% margin 1.00% per quarter 1.00% per quarter
Account blocked certificate USD 20 per quarter Afn 1200 per quarter
8.Interest rates on loans
Commercial loans 16%-20% per annum 16%-20% per annum
Consumer/ personal loans 16%-20% per annum 16%-20% per annum
Staff personal loan 10% per annum 10% per annum
Loan processing fees
Commercial loans
- Hypothecation accounts 1.00% 1.00%
- Pledge accounts 1.25% 1.25%
Consumer/ personal loans NIL NIL
Micro finance NIL NIL
Penal Interest 2% 2%
Security verification charges USD 25 for each verification USD 1250 for each verification
9.Inter branch transaction - Cash handling charges
Inter branch cash transaction up to USD 10,000 Nill Nill
Inter branch cash transaction above USD 10,000 USD 70 per USD 100,000 or part thereof Nill
No charges on inter branch cash AFN Transaction Nill Nill