Merchandise refers to a specific product or group of products or goods manufactured or acquired by a trading business for the purpose of sale.

A Merchandise Loan is a short-term credit facility provided by the Bank against which the merchandise or documentary evidence (Railway Receipt, Warehouse Receipt and Airway Bills) is held as a pledge or collateral for the loan.

The purpose of a Merchandise Loan Facility is to relieve the customer from cash-flow problems arising from money being tied up in the merchandise.

Merchandise Loan Facility shall be renewed every year unless the Bank demands it to be reviewed by the Credit Approving Team for any remedial action when the performance of the account is deteriorating.

Each advance shall be settled within ninety days except for the Merchandise Loan Facility against export standard coffee that is one hundred eighty days.

The amount of Merchandise Loan Facility has to be up to a maximum of 80% advance rate, depending on the type of merchandise, customer classification and credit risk grading level. However, for customers who deserve unsecured loans and advances, the Bank may extend the facility beyond 80% advance rate.

The Bank extends One-time or Revolving Merchandise Loan facilities:

• A One-Time Merchandise Loan is a credit facility whereby the loan contract remains enforce only until the maturity period of the loan.


• A Revolving Merchandise Loan Facility is similar to a One-Time Merchandise Loan, except that it can be renewed periodically prior to maturity.

Clik here to read about the Eligibility Criteria to apply for merchandise loan facility.