Prime-bank Limited

Risk Fund :

A risk fund shall be built up through compulsory contribution by each lessee on the cost of the lease item (s). The amount will be @ 1% in case of Machinery or Equipments and @ 2% in case of Automobiles.

Supervision and Follow Up :

Bank will engage supervising officers to exercise close and intensive supervision of the projects to ensure satisfactory performance. The assumptions which will be made at the time of appraisal in respect of safety, performance, end use and repayments should be satisfied through periodical review of the lessee's account and financial statements. Bank will make frequent on the spot inspection of the lessee's operation.

Transport Leasing :

Transport is one of the most widely traded lease items in the developed as well as developing countries of the world. The reasons behind success of transport leasing in many countries could by attributed to tax benefit, efficiency in found management and above all to the fact that user could exclusively use the leased transport by paying reasonable rental.

The major issues of transport leasing are detailed below:

1. Selection of Vehicle

The customer has the right to decide the brand of vehicle, negotiate the price with the manufacturers of dealers, arrange after sales services with the supplier.

2. Acquisition Cost

The acquisition cost shall be the actual purchase price after bargaining and all other incidental expenses incurred by the Bank including financial expenses.

3. Lease Term

In case of Transport leasing, the term shall be maximum 4 (four) years starting from the date of execution. But when the lease is cancelled for any reason the lessee will have to return the vehicle to the Bank together with the stipulated loss value mentioned in the agreement.

4. Lease Rental

Lease rentals calculated on the basis of acquisition cost and lease term shall be paid monthly.

5. Insurance

The vehicle shall be covered by Insurance throughout the lease term with the coverage decided by the Bank. The premium shall be paid by the lessee.

6. Repair & Maintenance

The lessee shall be obliged to maintain the vehicle for ensuring its normal operation and shall be solely responsible for loss/ damage as long as it is in his possession. Accordingly, repairing and maintenance cost for normal operation during the lease period shall be borne by the lessee.

7. Registration

The lessee will arrange the registration of the vehicle in the name of the Bank at his own cost and also pay annual taxes and fees payable to the concerned authority. In case of his failure, Bank will do it and recover the cost from him.

Salient Features of Lease Financing :

01.	Lease finance is offered for acquiring the use of Capital Machinery, Equipments, Medical Instruments and Automobiles.
02.	Financial Lease is long term in nature and is non cancelable.
03.	The customer will be required to make a deposit equivalent to 3 (three) months lease rentals to the Bank on the date of signing of the lease agreement which shall be refunded to the client at the expiry of the lease term.
04.	Bank will purchase the equipment after confirmation of the acceptance of the equipment by the client.
05.	On execution of Lease, the client and the Bank shall enter into an amendment lease agreement reflecting the actual acquisition cost.
06.	The customer will pay the first lease rental, insurance premium of the 1st lease year as well as any other charge in cash to the Bank on the date of execution of the Lease.
07.	The term of lease is maximum 5 (five) years in case of Capital Machinery, Equipment and Medical Instruments but 4 (four) years in case of Automobiles.
08.	The Lessee will pay service charge or project examination fee @0.15% on the sanctioned amount subject to a minimum Tk. 3,000 and maximum Tk. 10,000 in case of acquisition of machinery and Equipments for projects. In case of Automobile, a service charge of Tk. 500 is payable when the acquisition cost is below Tk. 10.00 lac and an amount of Tk. 1,000 is payable when the acquisition cost is Tk. 10.00 lac and above.
09.	The Lessee will pay monthly rental in advance starting from the date of execution till the end of lease term. Insurance charges are payable by the lessee at actual.
10.	A Risk Fund is payable to the Bank @ 1% of the acquisition cost in case of Capital machineries or equipments and @2% in case of Automobiles.
11.	The type of securities acceptable to the Bank will include: (1) Immovable Properties (2) Marketable securities such as FDR, PSP, BSP etc. (3) Bank guarantee. Insurance guarantee and Personal guarantee etc.
12.	On expiry of the lease term, the lessee may have an option to purchase the equipment at 5% of the acquisition cost. Besides the above option, the lessee may renew the lease on year to year basis or return the equipment to the Bank.

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