Working Capital Negotiation

Template / Sample Request Letter Format to Bank Manager ( SBI, ICICI, AXIS, IDBI, HDFC etc) for Reconsideration of Working Capital Limits / Loans Terms & Conditions

RCL/SBI/2013-14/

May 03, 2013

The General Manager,                                                

State Bank of India,

CASA Branch

Voltas House, Nariman Point

Mumbai – 458 458

Dear Sir,

Reg : Renewal of Working Capital Facilities

Ref : Your letter -----------  Dt. 12.04.2013

We acknowledge receipt of your sanctioned letter on 30^th April, 2013

We have verified your sanctioned terms and conditions incorporated in your above letter and we would like to inform you that we do not agree to accept following two conditions.

1.     Rate of Interest : Our existing rate of interest is SBAR 11.75% plus .75% i.e 12.5%. In your sanction you have hiked the rate of interest 2.50% above SBAR i.e effective rate 14.25% , to be applied  in our account as per your sanction.

We do not agree to accept this rate of interest. Undersigned,  during the meeting with you on 28^th February,2013 appraised you about financial position of the Company , in particular the reasons of incurring loss of the Company till the quarter ended December,2012 , and also informed you  the corrective measures already taken by the Company to arrest the loss.

As we are confident for turning around the company we sought your cooperation and support by retaining the existing rate of interest while renewing our limit. Your proposed rate of interest i.e 2.50% over SBAR will definitely take a toll upon our profitability and our attempt for turning around the company will be affected.

Hence, we request you to reconsider the rate of interest to be charged in our account, which will be a tremendous support to us and thereby hike of rate by other consortium member banks can also be prevented upon.

2.     Sanction of Non-Fund Based Limit : We also request you to reconsider the Non – Fund based Consortium limit which you have reduced from 150 Crores to 90 Crores.

Due to such huge reduction of Non – Fund based Consortium limit, our normal functioning will be disrupted. Moreover, the opportunity of placing bulk purchase order and thereby to avail the benefit of pricing opportunity, will be lost, which will ultimately affect our profitability.

In view of above, we trust, as a leader of consortium, you will be kind enough and as a measure of support will reconsider our rate of interest and will increase Non – Fund based Consortium limit as requested above.

Thanking you,

Yours Faithfully,

For Rocket Sales Ltd.

Anil Kapoor

President