Additional Interest Rate Reduction Letter

Sample Request Letter to Bank (SBI, ICICI, AXIS, HDFC, HSBC, IDBI etc.) for Excess Interest Rate Waiver on cash credit account (CC) in word/ .doc Format

October 4, 2013

The General Manager,                                                
State Bank of India,
Overseas Branch,
Cochin – 458 569

Dear Sir,

Sub : Our Working Capital Facilities with you

As our Company was running through a bad phase since June,2012,  considering  Consortium Bankers as our Financial Partner, we met you several times when we impressed upon to extent your support and help us to minimize our borrowing cost . Apart from discussions in person, we appraised you with several letters as above with reasons and facts in support of our requests.

It is worth mentioning that though our company ended with a net loss of Rs.5000.00 lacs during the last financial year 2012-13, the improvement of our performance by way of implementing our strategy to mitigate the accumulated loss by all round cost reduction, improvement of production quality and early realization of sale proceeds, has yielded results and also very well appreciated by you.

Unfortunately while our strategy started yielding result and we started showing improved performance from Mid January, 12 resulting lower loss in the last financial year, the incident of fire in the factory on 29th April,2012 is a bolt from the blue. Blast Furness Section of the plant got gutted resulting in stoppage of the production activities since some of the critical equipments got completely damaged in fire. We have commenced production from the last week of July 2012 and present production is quite satisfactory and alike to our pre-fire production quality. But meanwhile we have lost about three & half months’ production.

Immediately after fire, we also met you  several times with a request to minimize our interest burden, as we presumed at that stage that putting the system in order after repair will take at least 4/5 months time and due to loss of production our accumulated loss will be increased. 

But we regret to inform as our request has not been acceded by you and on the contrary our interest burden with other consortium banks have also increased, as all these bankers fall in line with your interest rate and they have also increased their rate immediately after your renewal.

You will appreciate that our unit is a viable unit and our produce has ready market, but higher rate of interest is burdening us, more so further hike of SBLR 50 basis point by you has again aggravated the borrowing situation and our finance cost has further gone up. 

So, to survive and make our unit profitable, we had no option but to borrow through Short Term alternatives with much lesser rate than Bank Interest. In view of above, we have to think about viability of the Company’s operation and therefore, compelled to plan for paying off all your outstanding balance as of date.

We sincerely request you to please allow us to pay the entire amount without any condition or burdening with any kind of charges.

Thanking you,

Yours faithfully,
For Rocket Sales Ltd.

Authorised Signatory

Encl. As above

The above format is also available here for download in Word Format


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