Cash flow Related Covenants
Which are intended to restrain cash outflows of the borrowers include:
• Restriction on new projects/expansion without prior approval of the financial institution.
• Limitation on dividend payment to a certain amount/rate and prior approval of the financial institutions for declaration of higher amount/rate.
• Arrangement to bring additional funds as unsecured loans/deposits to meet overrun/she and,
• Ceiling on managerial salary and perks.