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Transcript of 8-SME 30092009
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1
PresentationOn
Micro, Small & Medium
Enterprises
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The Small & Medium Enterprisesare critical to the nation’s economy – they contribute
approximately 40% of India’s domestic production,almost 50% of the total exports and 45% of Industrial
Employment. More important, they are the second
largest manpower employer overall after Agriculture.
SME in India are mostly in un-organised sector and
are the source of livelihood for millions of people. The
social contribution made by SMEs is even more
significant than its economic contribution. Within
SME sector, the Small Enterprises sector serves as
seed-bed for nurturing entrepreneurial talent and
originating units to grow eventually to Medium &
Large Enterprises.
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SME SECTOR – SIGNIFICANCE IN INDIAN CONTEXT
• SMEs are generally less capital-intensive and morelabour-intensive.
• Are best suited for countries like India and most of thedeveloping world having abundant supply of low-costmanpower and bountiful natural resources. Haveprovided seed bed for Enterprise Development in thecountry
• Provide large scale employment, ensure equitabledistribution of income and facilitate effective mobilizationof resources of capital and skills, which would otherwiseremain unutilized, particularly in rural and backwardareas.
• India has already established a niche in SMEDevelopment Strategy and providing excellent supportin product development, R&D, financial instruments,Infra-structure, marketing and export development
• Consequently, India is fast emerging as a global hubfor labour-intensive manufacturing and knowledge-
oriented businesses.
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Back DropHighlights of SMEs; Born out of Individual initiatives & skills.
Operational flexibility.
Low cost of production.
High propensity to adopt technology.
High capacity to innovate and exports.
High employment orientation.
Utilisation of locally available human and material
sources. Reduction of regional imbalance.
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Opportunities in SME Sector; Less Capital Intensive.
Extensive Promotion and Support by GOI.
Multiple funding option.
Manpower training.
Technical & Managerial skill development.
Centralised or shared tooling and testing support.
Reservation for exclusive purchases by GOI.
Growth in demand in domestic market.
Increasing export potential. Increasing linkages between large & small industries.
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• Consequent to globalization- SMEs are
facing challenges in following areas;
Credit.
Marketing.
Technology.
Infrastructure.
Regulatory bottlenecks. Impact of globalisation.
1. Decline in growth.
2. Decline in Exports.
3. Weakening of Domestic demand.
4. India is a preferred destination for dumping
for countries like China.
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POSITION OF SME ADVANCES VIS.A.VIS GROSS
CREDIT & PS CREDIT
S.N
o
(Rs. In crore)
Sectors 2005-06 2006-07 2007-08 2008-
09
2009-10
(June, 09)
2009-10
(Aug.,09)
a) Gross Credit 74627 96597 119508 154703 157979 149296
%age growth 23.5 29.4 23.7 29.45 38.06
b) PS Credit 33409 40197 43412 50793 51333 50726
%age growth 26.22 20.32 8.00 17.00 24.62 30.02
c) SME Credit 11689 14511 18199 23700 24841 24936
%age growth 28.77 24.14 25.41 30.23 46.20 49.47
Share of SME out of
gross credit-%age
15.66 15.02 15.22 15.31 15.72 16.78
d) Share of MSE out of
above (c)
8612 11028 13819 18035 18598 18763*
e) Micro & Small
Enterprises – PS
8612 11028 12294 16083 16611 16598
f) Share of SE out of
PS credit-%age
25.78 27.43 28.31 31.09 32.35 32.72
*The SOI of MSE advances of the Bank is Rs. 22543 crore.
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ISSUES……….
• Lack in knowledge of;
1. Importance of MSME sector in financing.2. Schemes/products of Financing.
3. Details of Promotional schemes for MSME sector
like Credit Guarantee Scheme of CGTMSE, Soft
loan assistance scheme i.e National Equity Fund& Mahila Udyam Nidhi Yojana and incentive
scheme for obtention of ISO 9000 certification.
4. GOI subsidy/incentive benefits for technology
upgradation & modernisation under Textile & Jutesector (TUFS), Small Enterprises Sector in select
products/by products (CLCSS) and Food & agro
Processing sector extended to these sectors through
Banks.
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Cont…. 5. Branches not offering focused approach towards
financing of Service Sector activities, as this sectoroffers comparatively large scope of financing
comparatively to Manufacturing Sector.
6. Despite simplification of appraisal system,
dependence on services of Technical Officers forproject appraisal even though in small cases.
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Over view on SME
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Enterprises Enterprises engaged in
Manufacturing /
production/processing(Investment in Plant &
Machinery)
Services
(Investment inEquipments)
Micro Upto Rs 25 lakh Upto Rs 10 lakh
Small Above Rs 25 lakh &
upto Rs 5 crore
Above Rs 10 lakh
& upto Rs 2 crore
Medium Above Rs 5 crore &
upto Rs 10 crore
Above Rs 2 crore
& upto Rs 5 crore
The Micro, Small & Medium Enterprises Development
(MSMED) Act, 2006 provide facilitation in promotion &
development and enhancing the competiveness of micro, small
& medium enterprises – DEFINITION OF MSME
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The Scope of the MSMED Act, 2006 hasbeen enlarged by incorporating advances to
all business & Service activities under theambit of MSME sector like financing to Retail
Trade, Educational Institutes, Architects and
interior design consultants, Packaging &
Transport/taxi services, Event management, Travel & Tour operators, Storage & warehouse
services, Clearing & forwarding agents,
Telecom & communication services,
Healthcare centres, Hotel & Restaurants,
Coaching Centres, Publicity & media coverage
and Market research agencies. The illustrative
list of the service activity ………………………...
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Illustrative List of Service activities
1. Consultancy Services including Management Services
2. Renting of Agricultural Machinery (Harvesting)
3. Composite Broker Services in Risk and Insurance
Management
4. Third Party Administration (TPA) Services for Medical
Insurance Claims of Policy Holders
5. Seed Grading Services
6. Training-cum-Incubator Centres
7. Educational Institutions
8. Training Institutes
9. Retail Trade
10. Practice of Law, i.e., legal services
11. Trading in medical instruments (brand new)
12. Placement and Management Consultancy Services
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13. Advertising agency
14. Advances to Transport Sector
15. Advances to Small & Large Business activities
16. Advances to Professionals & Self Employed17. Nursing homes/clinics
18. Courier Services
19. Architecture Designers
20. Events Management
21. Catering
22. Gems & Jewellery designing
23. Equipment Rental & Leasing
24. Typing Centres
25. Xeroxing
26. Industrial Photography
27. Industrial R & D Labs.
28. Industrial Testing Labs
29. Desk Top publishing 14
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30. Internet Browsing/Setting up of Cyber Cafes.
31. Auto Repair and service centers
32. Documentary Films on themes like Family Planning, Social forestry,
energy conservation and commercial advertising33. Laboratories engaged in Testing of Raw Materials, Finished Products
34. “Servicing Industry” Undertakings engaged in maintenance, repair, testing
or electronic / electrical equipment / instruments i.e. measuring / control
instruments servicing of all types of vehicles and machinery of any
description including televisions, tape recorders, VCRs, Radios,Transformers, Motors, Watches etc.
35. Laundry and Dry Cleaning
36. X-Ray Clinic
37. Tailoring, boutiques
38. Servicing of agriculture farm equipment e.g. Tractor, Pump, Rig, Boring
Machine etc.
39. Weight Bridge
40. Photographic Lab
41. Blue printing and enlargement of drawing / design facilities 15
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42 ISD / STD Booths
43. Teleprinter / FAX Services
44. Sub-contracting Exchanges (SCXs) established by Industry Associations
45. Coloured or Black & White Studios equipped with processing laboratory46. Ropeways in hilly areas
47. Installation and operation of Cable TV Network
48. Operating EPABX under franchises
49. EDP Institutes established by Voluntary Associations / Non-Government
Organisations
50. Beauty Parlors and Crèches
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Service Sector Schemes.1. Sector Specific Schemes;
a. Advances to Transporters – Scheme .
b. Advances to Owner-drivers of Taxis, Cars, Scooters, Station Wagons,
Tempos, etc .
c. Advances to Professional & self Emp. Persons. – Scheme.
d. Advances to dealers in petroleum products .
e. Financial assistance to Ex-Servicemen for setting up of Lubricant
booths in Rural areas & setting up of Cyber Connect.
f. Scheme for financing to War-widows for setting up of Small Service &Business activities.
2. Advances to Small Scale Service & Business Enterprises(SSSBEs) as per list attached.
3. Advances to other Service Sector Activities: covered under
RMD. L & A Circular No. 20/2005 and 93/2008 Dated8.5.2008.
4. Advances to Retail Traders – Scheme.
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Manufacturing Sector Schemes.1. Sector Specific Schemes;
a. Advances to Micro Enterprises.
b. Scheme for acquisition of ISO-9000 certification
c. Scheme for financing artisans, village and cottage industries.
d. Scheme for financing craftsman & qualified technician Entrepreneurs.
a. Scheme for financing Handloom weavers & artisans engaged in
handicrafts.
b. Scheme for financing housewives and other women.2. Umbrella Scheme. – Scheme for financing Small Enterprises.
3. Add on Schemes
a. Scheme for financing Artisans under PNB ACC scheme.
b. PNB Laghu Udyami Credit Card Scheme.
c. PNB SME Sahayog Scheme.d. PNB Green Scheme.
4.
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Systems Bottlenecks
• Lack of expertise for financing SMEprojects.
• Requirements of services of Technical
Officers for appraisal of every projectseven for traditional activities projects.
• Non – adoption of simplified method for
calculation of Working Capital limit up to
Rs. 5 crore.• Improper utilisation of trained man
power.
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Systems Simplification• Concessions available to MSME borrowers .
• Extension of credit facilities under simplified scheme forMicro Sector like PNB Artisans Credit Card Scheme &
PNB Laghu Udyami Credit Card Scheme.
• Extension of Working capital as per Nayak Committee
recommendations through simplified process techniques;
CMA Data waived Quarterly QMS data waived
Current ratio relaxed from 1.33:1 to 1.25:1
Requirement of audited accounts waived having sales less
than Rs 40 lakh.
• Launching of Score Based Lending techniques for
disposal of loans up to Rs. 50 lakh. (to be enhanced to Rs.
2 crore shortly).
• Preparation of Standard Project Profiles of commonly
prevailing Industries. (LDMs have been advised to
complete this exercise latest by December, 2009) 20
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INITIATIVES TAKEN BY
BANK TO BOOST SMEADVANCES
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17 April 2012
1. MSME SPL. BRANCHES :
The Bank has operationalised 510 Specialised
MSME branches/ focus branches to provide hasslefree credit- single window services to SME borrowers.
• The 58 specialised SME branches covering 8.72% of
the total SME business during 2008-09. As at June,
2009 the share of these SME branches out of total
SME business is 8.15%.
• These branches covers all important industrial
clusters/ industrial towns and urban centers with
potential for SME advances. These branches shall
have expertise to offer all types of facilities for SMEs.
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2.Adoption of Cluster Approach to SME Financing
• Initially, the bank adopted four SME clusters at “Ludhiana
(Hosiery & Sewing Machines) & Mandi Gobindgarh (Steel re-
rolling mills) in Punjab; Kurukshetra (Rice shellers); Gurgaon
(Auto ancillaries) in Haryana.
• During 2008-09, our Bank has adopted eleven more clusters
at Jalandhar (sports goods); Trichy (Engineering goods);
Panipat (Textile); Bhilwara (Textiles); Ahmedabad
(Pharmaceuticals); Agra (leather); Jaipur (Ball Bearings);Moradabad (Brass-wares); Aligarh (locks); Khurja (Pottery);
Meerut (Sports goods).
• To cater the financial needs of Artisans, our Bank has
adopted Moradabad Mega Cluster identified by GOI, where
approximately 15,000 will be covered under credit linkage.
• We shall conduct annual study of SME clusters by deputing
Officer (industry) and MTMs to identify their credit
requirements and launching of innovative lending products.
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3.Special focus- Service Sector Financing
• This segment presently constitutes 15% of SMEfinance and it was proposed to increase by 40% of
total MSME advances by focused attention.
• Special emphasis has been given for advances to
service sector.
• Growing opportunities /scope available by new
MSME definition in Services sub sectors i.e.
Transport, Educational Institutes, Hospitality
,Health and Retail Trade shall be explored by better
focus on segments by creating independent desks.
.
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4.Implementation of Dr. K.C. Chakrabarty
Working group recommendations on SME
Growth & Rehabilitation of Sick SMEs-The Bank has implemented the recommendations of the group
in respect of:-
• SME Centres (HUB) have been set up at Delhi, Kolkata, Chennai,
Mumbai, Ludhiana, Amritsar & Chandigarh.
• The Centralised Processing Centres have been set up at CircleOffices for quality lending and speedy decisions.
• Bank has developed Score Based Lending Model for SME loans
upto Rs 50 lakh and is under pilot run in all specialised SME
branches before launch.
• SME Rehabilitation-cum-Care Centres have been set up at Circle
Offices and specialised SME branches
• Cluster based lending approach has been adopted by adopting 15
SME clusters.
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5.Adoption of Code of Conduct for Micro
Small Enterprises (MSE Code) .
– We have adopted the above Code for
implementation.
– In line with the commitments madeunder the Code, Micro and Small
Enterprises customers shall be provided
easy access to our services.
– We shall also maintain desired standardsof service and ensure transparency in our
dealings.
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6 Mi E t i
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6. Micro EnterprisesFor quick disposal of Micro Enterprises loan proposals:
The cases of Micro enterprises are kept outside the ambit of SME
HUBS/ Central Credit Processing Centers.
Simplified loan application for loans up to Rs. 50 lakh.
Branch Managers have been vested with powers to directly
dispose of proposals at Branch Level.
To ensure maximum sanction at Branch Level for
cutting delays, BM’s have been vested with special higherloaning powers for financing micro enterprises
(manufacturing/service) covered under CGTSME Scheme :
Scale – II Managers vested with the powers of Scale-III for
disposal of MSME advances.
Scale – III Managers vested with 125% of their vested loaningpowers.
“Focused attention for extending Collateral freeloans up to Rs. 100 lakh” and Next Higherauthority can permit acceptance of guarantee/
Collaterals.
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17 April 2012
7 Reduction in margin money requirements
For Women Beneficiaries:
(Maximum Margin 10% only irrespective of Loan
amount)
1. CASH CREDIT/MEDIUM TERM LOAN
o Upto Rs. 2 lakh : Nil
o Above Rs. 2 lakh : Maximum Margin 10%
o Rate of Interest concessions from 0.25% to 50% over
the applicable rate (0.50% on Priority Sector and
0.25% on non Priority Sector advances)
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For Other category of borrowers:
1. CASH CREDIT/ MEDIUM TERM LOAN
• Upto Rs. 2.00 lakh : NIL
• Above Rs.2 lakh & upto
Rs 5 lakh : 15%
• Above Rs.5 lakh :20%
2. Cash Credit (Pledge) : 15%
3. Cash Credit (Book Debts)
I Limits upto Rs.5 lakh : 20%
II Above Rs. 5 lakh : 25%
• d) Bills for collection • ABC limits covering RRs and MTRs of IBA approved : 20%
transporters
• Govt. supply bills : 10%
4. For purchase of old machinery
Minimum life of 5 years.( In case of old
generator sets, it should not be older than three years). :25%*
5. Against existing unencumbered machinery : 25%
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17 April 2012
8. Assessment of Working Capital
Working capital to SME borrowers is assessed
as per simplified turn over method (NayakCommittee ) for cash credit limit up to Rs.
5 crore.
For assessment of working capital;
CMA Data waived
Quarterly QMS data waived
Current ratio relaxed from 1.33:1 to 1.25:1
Requirement of audited accounts waivedhaving sales less than Rs 40 lakh.
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9. Credit facilities in emergent circumstances – over & above Drawing Power
Special credit limit under PNB SME SAHAYOG Scheme is extended
for an amount equal to 20% of the aggregate working capital limits(i.e. fund based and non fund based separately) sanctioned,subject to a maximum of Rs.25 lakh with out linking to DP forcontingencies like additional purchase of raw materials includingpacking materials/handling charges for the execution of bulkorders, taking part in national/international trade exhibitions for
creating market base, payment of consultancy charges, repairs tomachinery, labour payments, etc.
In order to meet payment of statutory dues exclusively like incometax, sales tax, excise duty and other expenses like electricity charges, custom duties, telephone expenses by SSI units in
emergent circumstances, bank will provide/ sanction 5% GreenCash Credit facility maximum upto Rs.2.00 lakh of the fund basedsanction limit/assessed permissible bank finance, over & aboveregular adhoc facility or Credit Facility availed by SSI units underSME Sahayog and available drawing Power.
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10. Project Financing: Relaxation in level of Debt
Equity Ratio (from acceptable level of 2:1 for project
financing;
The Circle Heads shall relax up to 2.50:1. The GeneralManager(HO) relax up to 3.00:1 and ED/CMD shall relax up
to 4.00:1.
11. Processes for speedy disposal of SMEprojects
SME Centres (HUB) : have been set up at Delhi, Kolkata,
Chennai, Mumbai, Ludhiana, Amritsar & Chandigarh. The Centralised Credit Processing Centers have been set
up at Circle Offices for quality lending and speedy decisions.
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12 Di t i t i P j t R t
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12. District-wise Project Reports
With a view to obviate the need for detailed project
reports with every proposal, common industrialactivities prevailing in a district are being identified
for preparation of standard project reports
initially for projects up to Rs. 1 crore to be
extended subsequently up to Rs. 2 crore. Theseproject reports are approved for a district. This shall
help the borrowers to use these standard project
reports while developing their projects while the
branch do not undertake specific techno-economicviability study for proposals under these activities
where the standard project reports have been
prepared. 33
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17 April 2012
13. Setting up of SME Rehabilitation cum
care centers
The Bank has set up Rehabilitation cum Care
Centers at Circle Offices / SME branches
manned by officials having expertise in financing
SMEs. These Centers have SME Managers forgrowth and development and SME Managers for
counseling. They guide the MSME units on the
matters relating to their financial needs and the
facilities available from the Banks / Govt. / RBI.
The Circle wise list and names of the dealing
officials are available on Bank’s web-site.
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14. Credit Ratings: The Bank has approved SMERA,
CRISIL rating companies for providing independent
risk rating of SME projects. As at March, 09 SMERA
& CRISIL have rated 231 and 188 SME accounts of our bank respectively.
The Bank is extending concession of 0.50% and
0.25% in chargeable rate of interest to the borrowers
of SMERA & CRISIL rating having rating grade 1 & 2
and grade 3 respectively.
Bank is having equity participation in SME rating
agency (SMERA).
3517 April 2012
CGTMSE
SCHEME FOR FINANCING TRANSPORT OPERATORS
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SCHEME FOR FINANCING TRANSPORT OPERATORS
ELIGIBILITY:
• An individual or an association desirous of owning
transport vehicle(s), for carrying passengers or goods onhire, hold the necessary driving license or engage driver
(s) possessing valid license and granted a permit by an
appropriate authority to ply vehicle (s) for passengers or
goods traffic for hire.
EXTENT OF LOAN - FOR NEW TRUCK(S)/BUS (S) : • 90% loans of the invoice cost of the vehicle inclusive of
the cost of chassis, construction of body thereon.
MARGIN
For new Trucks/ Buses For New Trucks: 10%
For New Buses : 10%
For Old Vehicle: 15%
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COLLATERAL SECURITY :
• No collateral security or third party guarantee
should be taken for loans up to Rs. 100 lakh covered
under Credit Guarantee Scheme of CGTMSE. Interms of Loans & Advances Circular No. 34 dated 7th
March 2008 and PSLB/SME Circular No. 55/2008
dated 6th August, 2008, permission of Circle Head be
obtained for accepting collateral security.• INTEREST : As per bank’s guidelines issued from
time to time as applicable to Micro, Small & Medium
Enterprises (Service Sector) according to the amount
of loan.. (As per Loans & Advances Circular. No.16/2009 dated 31st January 2009) “Subject to
change from time to time”.
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SCHEME FOR FINANCING TO OWNER DRIVERS OF
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SCHEME FOR FINANCING TO OWNER-DRIVERS OF
TAXIS, CARS, SCOOTERS, STATION WAGONS, TEMPOS.
ELIGIBILITY:
• Individuals who: • hold a driving license;
• hold a permit to ply a taxi; and
• have arranged to buy a vehicle in their own names.
EXTENT OF LOAN :
• 100% for loans up to Rs. 2 lakh, 85% for loans above Rs. 2 lakh &
upto Rs. 5 lakh and 80% for loans above Rs. 5 lakh of the invoice
cost of the vehicle inclusive of the cost of chassis,
construction of body thereon and the fare meter as the casemay be.
MARGIN
For new Vehicle: 10%
For Old Vehicle: 15% 38
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COLLATERAL SECURITY :
• No collateral security or third party guarantee
should be taken for loans up to Rs. 100 lakh covered
under Credit Guarantee Scheme of CGTMSE. Interms of Loans & Advances Circular No. 34 dated 7th
March 2008 and PSLB/SME Circular No. 55/2008
dated 6th August, 2008, permission of Circle Head be
obtained for accepting collateral security.• INTEREST : As per bank’s guidelines issued from
time to time as applicable to Micro, Small & Medium
Enterprises (Service Sector) according to the amount
of loan.. (As per Loans & Advances Circular. No.16/2009 dated 31st January 2009) “Subject to
change from time to time”.
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SCHEME FOR FINANCING PROFESSIONALS &
SELF EMPLOYED PERSONS
ELIGIBILITY
• Persons already practicing or new entrants in various
professions.
PURPOSE
• Loans under this Scheme may be granted for thepurpose of financing purchase of equipment used by
the borrowers and/or for working capital
requirements, in their professions.
EXTENT OF LOAN
Need based for purchase of equipments, business
premises, construction, making alterations or
renovation of business premises/nursing homes or to
meet working capital needs
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MARGIN
• Nil upto Rs 25,000/-
• 25% above Rs 25,000/-.where subsidy, if available, will form part of margin
money .
COLLATERAL SECURITY :
• No collateral security or third party guaranteeshould be taken for loans up to Rs. 100 lakh
covered under Credit Guarantee Scheme of
CGTMSE. In terms of Loans & Advances Circular
No. 34 dated 7th March 2008 and PSLB/SME
Circular No. 55/2008 dated 6th August, 2008,
permission of Circle Head be obtained for accepting
collateral security.
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Scheme for advances to Petroleum Products
ELIGIBILITY: Indian National holding letter of intent
for dealership of retail sale of diesel and lubricants,kerosene oil, LPG gas from IOC or any other Public
Sector Company.
PURPOSE: To finance unemployed engineers,
graduates, physically handicapped disabledpersons, widows, freedom fighters, SC/ST and
other to whom retail dealership of superior
kerosene oil, light diesel oil, high speed diesel, LPG,
have been allotted by PS petroleum company.
EXTENT OF LOAN: Up to Rs. 1,42,000 depending
upon the type of products
MARGIN: Up to Rs. 25,000/- NIL
Above Rs. 25,000/- 25% 42
Ad t E S i f tti f
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Advances to Ex-Servicemen for setting up of
Lubricant Booths.
ELIGIBILITY: Ex-serviceman including physically
handicapped Defence personnel.
PURPOSE: To establish Lubricant Booth in rural area to supply
Oil/Lubricant manufactured by standard oil companies and
Tractor / Auto Spares in rural areas where Tractors‟ population
is high and there is no petrol pump in the vicinity so that theventure proposed is viable.
EXTENT OF LOAN: Composite Term Loan Maximum
Rs.50,000/-. For fabrication / acquisition of Booth (Max.
Rs.20,000/-) and for meeting Working Capital needs (Max.Rs.30,000/-).
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MARGIN: 20%
COLLATERAL SECURITY :
(i) In case Ex-servicemen/Defence Personnel drawingpension/salary from the branch disbursing the loan:
• Hypothecation of stocks / assets created by the bank loan.
Further a suitable guarantee in addition to guarantee of spouse
be obtained.(ii) In case Ex-serviceman/ Defence Personnel not drawing
pension / salary from the branch disbursing the loan:
• In addition to hypothecation of stocks / assets created by the
bank loan, collateral security which may include LIC Policy,NSCs, KVPs, IVPs, Banks FDRs etc. or immovable property to
secure the loan be obtained besides suitable guarantee
acceptable to the bank.
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Advances to Ex-Servicemen for setting up of
Cyber Connect.
ELIGIBILITY: Ex-serviceman / Battle causalities
including their dependents and dependents of serving army personnel having basic training of
computers.
PURPOSE: To set up a cyber connect at educationalinstitutions, army training institutions, railway
stations, courts & collectorates, etc.
EXTENT OF LOAN: Maximum. Rs.2.00 lakh.
MARGIN: 20%
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COLLATERAL SECURITY :
(i) In case Ex-servicemen / Defence Personnel drawingpension / salary from the branch disbursing the loan:
Hypothecation of Computers, Cyber connect Kit, NIC,
Power Conditioning Equipment, Computer Diaries,
Printers and Stabilizers etc. Further a suitable guarantee
in addition to guarantee of spouse be obtained.
In case of loans to dependents, parents/spouse will stand
as guarantor in addition to suitable guarantee acceptableto the bank.
(ii) In case Ex-serviceman / Defence Personnel not
drawing pension / salary from the branch disbursing
the loan:
In addition to hypothecation of assets as stated above,collateral security which may include LIC Policy, NSCs,
KVPs, IVPs, Banks FDRs etc. or immovable property to
secure the loan be obtained besides suitable guarantee.
Ad t W id f tti g f S ll
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Advances to War-widows for setting up of Small
Service & Business Activities.
ELIGIBILITY: War widows
PURPOSE: To set up Small Service & Business Activities.
The illustrative list of activities, which can be undertaken, has
been given as per Appendix. Activities other than as
mentioned in illustrative list can also be undertaken by the warwidows if found technically feasible and economically viable
by the sanctioning authority.
• EXTENT OF LOAN: Maximum Rs.2.00 lakh (In RuralAreas)
• Rs. 5.00 lakh (In Semi Urban, Urban & Metros)
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MARGIN: 10% (irrespective of loan amount)
COLLATERAL SECURITY :
(i) For loans upto Rs.2.00 lakh:
• Hypothecation of Primary Security created out of loan
amount etc.
• Third party guarantee acceptable to bank be obtained
(ii) For loans above Rs.2.00 lakh and upto Rs.5.00 lakh.
• In addition to hypothecation of assets as stated above,collateral security which may include LIC Policy, NSCs,
KVPs, IVPs, Banks FDRs etc. or immovable property to
secure the loan be obtained besides suitable guarantee.
• NOTE : If, however, the loan account is eligible for
coverage under Credit Guarantee Fund Trust Scheme(CGTSI), No collateral security and third party guarantee
be obtained.
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Advances to Micro and Industry Related
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Advances to Micro and Industry Related
Service/Business Enterprises.
ELIGIBILITY: Small units having investment upto Rs
10.00 lakh in fixed assets, excluding land & buildingengaged in industry related service/business would be
entitled to the same concessions and incentives as
available to Small Scale Industries and ancillary
industries.
EXTENT OF LOAN: The credit facilities for SSSBEs may
be provided on the principle of need based requirement,
on the basis of simplified procedure.
• Composite Loan (Working Capital Term Loan) upto
Rs.100.00 lakh can be sanctioned to meet therequirement of funds for purchase for fixed assets and
working capital in case of those units, which require
loans upto Rs.100.00 lakh respective of their location.
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MARGIN:
For loans up to Rs. 25,000/- : NIL
For Loans above Rs. 25,000/- : 25%
COLLATERAL SECURITY :No collateral security or third party guarantee should
be taken for loans up to Rs. 100 lakh covered under
Credit Guarantee Scheme of CGTMSE. In terms of
Loans & Advances Circular No. 34 dated 7th March
2008 and PSLB/SME Circular No. 55/2008 dated 6th
August, 2008, permission of Circle Head be obtained
for accepting collateral security.
However, as per RBI guidelines, non-obtention of
collateral security in case of loans upto Rs 5 lakh to be
extended to all new units of Micro & Small Enterprises
both Manufacturing and Service Sector is mandatory.
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SCHEME FOR FINANCING SERVICE ACTIVITIES AS PER
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SCHEME FOR FINANCING SERVICE ACTIVITIES AS PER
LOANS & ADVANCES CIRCULAR NO.20/2005 and 93/2008
PURPOSE
• To finance fixed assets required for setting up thebusiness including purchase of shops/offices.
EXTENT OF LOAN
• Working Capital Facility (FB & NFB) & Term Loan –
Need based
i) For purchase of shop- cum- office space – Maximum
Amount Rs.50.00 lakh per unit.
ii)Small service providers those may find difficulty in
making regular transactions from CC account,Working Capital Term Loan (WCTL) upto Rs.25 lakh
shall be granted.
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MARGIN
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MARGIN
• Working Capital Limits & Term Loans 20% - 40%
SECURITY :
a) Hypothecation/pledge/ mortgage/ assignment, etc. of stocks/book debts/future receivables/assets of the
borrower.
b) equitable/registered mortgage of the shop-cum-office
premises if financed by the bank.
(c) In cases where mortgage of the shop/office premisesfinanced by the bank cannot be created immediately, the
loan may be extended by : (i) Mortgage of another suitable
property having value of at least 125% of loan amount and
(ii) Suitable guarantee.
INTEREST
Upto Rs.2 lakh : BPLR
Above Rs.2 lakh: As per interest rate guidelines depending
upon risk rating/ the aggregate score obtained on the basis
of compliance of parameters. 52
Illustrative List of SSSBEs Activities
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Illustrative List of SSSBEs Activities
• Advertising Agencies
• Marketing Consultancy
• Industrial Consultancy
• Equipment Rental & Leasing
• Typing Centres
• Photocopying centres (Xeroxing)
• Industrial Photography
• Industrial R&D Labs
• Industrial Testing Labs• Desk Top Publishing
• Internet Browsing/ Setting up of Cyber Cafes
• Auto Repair, Services and Garages
• Documentary Films on themes like family planning, social forestry, energy conservation and
commercial advertising
• Laboratories engaged in testing of raw materials, finished products
• „Servicing Industry‟ Undertakings engaged in maintenance, repair, testing or servicing of all
types of vehicles & machinery of any description including electronic/electrical
equipment/instruments, i.e., measuring/control instruments, televisions, tape recorders, VCRs,
radios, transformers, motors, watches, etc.
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• Laundry & Dry-cleaning
• X-Ray Clinic
• Tailoring
• Servicing of Agricultural Farm equipment, e.g., Tractor, Pump, Rig, Boring Machines,
etc.
• Weigh Bridge
• Photographic Lab
• Blue printing and enlargement of drawing/designs facilities
• ISD/STD Booths
• Teleprinter/FAX services
• Sub-contracting Exchanges (SCXs) established by Industry Associations
• EDP Institutes established by Voluntary Associations/ Non-Government Organisations
• Coloured, and Black and White Studios equipped with processing laboratory
• Ropeways in hilly areas• Installation and operation of Cable TV Network
• Operating EPABX under franchises
• Beauty Parlours and Creches
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Service activities as per L&A Circular No. 20/2005• Job contractor/maintenance contractor of civil work, electrical
& plumbing, air-conditioning, lift security, horticulture services,
security, etc.• Architects and interior design consultants
• Packaging & Transport/taxi services
• Event management
• Travel & Tour operators
• Storage & warehouse services
• Clearing & forwarding agents
• Telecom & communication services
• Healthcare centres
• Business Services/Business Solution including Softwareservices/ packages, Call centres/BPO, IT enabled services, data
processing, IT security, leasing of IT equipments/Infrastructure,
system integration, legal services, valuation services/assessors,
accounting & billing, etc.
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Service activities as per L&A Circular No. 20/2005• Consultancy
• Hotel & Restaurants
• Coaching Centres
• Publicity & media coverage
• Market research agencies
• Shopping Mall owners against the turnover commission/ rent
receivable from the tenant.• Franchise agreements
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SCHEME FOR FINANCING RETAIL TRADE ACTIVITIES
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SCHEME FOR FINANCING RETAIL TRADE ACTIVITIES
ELIGIBILITY
• Traders, who are individuals, firms, HUFs,cooperative societies registered under any law
relating to cooperative societies and companies etc..
PURPOSE
• Financing of stock in trade, book debts (not olderthan four months) and other assets to be used in
the trade.
EXTENT OF LOAN
• Working Capital/Term Loan (fund based & non-fund based) - Need Based
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MARGIN
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MARGIN
• Term Loan 30%
• Working Capital Limits: Against Stocks 30% - 40%,
keeping in view nature of stocks, price fluctuation, shelf life etc.
• Against Receivables: 40%
COLLATERAL SECURITY :
• Legally Enforceable Equitable/Registered Mortgage of IP /
pledge or creation of charge on liquid security having
realizable/ surrender value equal to the amount of
loan/credit facilities;
• However, in case of loans /limits up to Rs.5 lakh, advance
should be collaterally secured by way of suitable thirdparty guarantee and mortgage of IP may not be insisted
upon.
• In case the mortgage of IP is offered by third party, the
mortgagor must be made guarantor in the account.
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Manufacturing Sector
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Manufacturing Sector
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Scheme for advances to Micro Enterprises
ELIGIBILITY: The Micro Enterprises is a part of Small Enterprises
engaged in the manufacture or production, processing or
preservation of goods are;
“A Micro enterprise is an enterprise where the investment in plant
and machinery (original cost excluding land and building and the
items specified by the Ministry of MSME does not exceed Rs. 25
lakh;‟
PURPOSE: The financial assistance is to be provided to both new
and existing units, for acquiring fixed assets i.e. land, factory, building,
plant & machinery and working capital facilities.
EXTENT OF LOAN: Need based finance is to be provided.
• MARGIN: C h C dit (H ) d T L
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• MARGIN: Cash Credit (Hyp.) and Term Loan
• Upto Rs. 2.00 lakh : NIL
• Above Rs.2 lakh & upto Rs 5 lakh : 15%
• Above Rs.5 lakh : 20%
RATE OF INTEREST: As per Loans & Advances
Circular No. 16/2009 dated 31st January, 2009
COLLATERAL SECURITY: No collateral security or third
party guarantee should be taken for loans up to Rs. 100 lakh
covered under Credit Guarantee Scheme of CGTMSE. In terms of
Loans & Advances Circular No. 34 dated 7th March 2008 and
PSLB/SME Circular No. 55/2008 dated 6th August, 2008,
permission of Circle Head be obtained for accepting collateral
security.However, as per RBI guidelines, non-obtention of collateral
security in case of loans upto Rs 5 lakh to be extended to all new
units of Micro & Small Enterprises both Manufacturing and
Service Sector is mandatory.
Scheme for acquisition of ISO 9000 certification
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Scheme for acquisition of ISO 9000 certification
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OBJECTIVE: To promote quality management system in SSI
units with a view to strengthening their marketing and exportcapabilities.
PURPOSE: Financial assistance is to be provided for acquiring
ISO-9000 certification, e.g. expenses on consultancy,
documentation, audit certification fees, equipment and
calibrating instruments required would be taken into account for
determining the loan requirement.
EXTENT OF LOAN: Assistance under the scheme will be need
based, by way of Term Loan.
MARGIN: Term Loan
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MARGIN: Term Loan
• Upto Rs. 2.00 lakh : NIL
• Above Rs.2 lakh & upto Rs 5 lakh : 15%
• Above Rs.5 lakh : 20% RATE OF INTEREST: As per Loans & Advances Circular No.
16/2009 dated 31st January, 2009
COLLATERAL SECURITY: No collateral security or third party
guarantee should be taken for loans up to Rs. 100 lakh covered
under Credit Guarantee Scheme of CGTMSE. In terms of Loans& Advances Circular No. 34 dated 7th March 2008 and
PSLB/SME Circular No. 55/2008 dated 6th August, 2008,
permission of Circle Head be obtained for accepting collateral
security.
However, as per RBI guidelines, non-obtention of collateralsecurity in case of loans upto Rs 5 lakh to be extended to all
new units of Micro & Small Enterprises both Manufacturing and
Service Sector is mandatory.
Scheme for financing Artisans Village & Cottage
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Scheme for financing Artisans, Village & Cottage
Industries
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ELIGIBILITY: The Artisans/village and cottage industries
requiring assistance must have a fixed place of work. Theentrepreneurs should have adequate experience/training in the
art/craft manufacturing or servicing activity they are practicing
or propose to engage themselves in. Their products/services
should be, competitive, of good quality and should have an
assured/pre-ascertained market.
OBJECTIVE: To financially assist artisans(irrespective of
location) or small industrial activities (manufacturing,
processing, preservation and/or servicing) in village and small
towns with a population not exceeding 50,000 involving
utilisation of locally available natural resources and/or human
skills and having individual credit requirements not exceeding
Rs 50,000/-. The purpose is to create employment opportunities
for productive purposes.
EXTENT OF LOAN
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EXTENT OF LOAN
• Maximum Rs.50,000 for (i)Term Loan or (ii)Working
Capital requirements or both depending upon the
requirement of the borrower keeping in viewmaximum permissible limit of Rs.50000/- and
ensuring end use of funds. Loans may be
sanctioned by way of composite loan(WCTL).
MARGIN: NIL
RATE OF INTEREST: As per Loans & Advances
Circular No. 16/2009 dated 31st January, 2009.
COLLATERAL SECURITY: No Collateral security is tobe obtained
Scheme for financing Craftsman & Qualified
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Scheme for financing Craftsman & Qualified
Technician Entrepreneurs
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OBJECTIVE
To assist technician entrepreneurs proposing to set up smallscale industries but are unable to do so for lack of sufficient
resources to provide even the minimum capital, the owner's
equity usually required for securing loan facilities.
PURPOSE: For acquisition of fixed assets (plant, machinery,
land, building, tools etc.
• For working capital requirements within the ceiling limits
of Rs.3 lakh/ Rs.5 lakh as the case may be.
EXTENT OF LOAN: The total financial assistance to an
eligible entrepreneur will be limited to Rs.3 lakh, while incase of partnership or private limited units (constituted by
two or more technician entrepreneurs) it will be upto Rs 5
lakh.
ELGIBILITY: Technically qualified entrepreneurs and/or
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y q p /
those who have acquired adequate practical professional
experience(technical) in a particular field of technology
which is being brought to bear on the project promoted by
him/them,(singly or jointly in partnership or as directorsof the private limited co.), having worth-while small
Enterprises projects with integrity and the ability to make
the enterprise work successfully.
MARGIN: Term Loan • Upto Rs. 2.00 lakh : NIL
• Above Rs.2 lakh & upto Rs 5 lakh : 15%
• Above Rs.5 lakh : 20%
RATE OF INTEREST: As per Loans & Advances CircularNo. 16/2009 dated 31st January, 2009
COLLATERAL SECURITY: No collateral security required.
Scheme for financing Handloom Weavers & Artisans
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Scheme for financing Handloom Weavers & Artisansengaged in Handicrafts.
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ELIGIBILITY: The artisans should have a fixed place of
business, should be qualified/ experienced in the operationof handloom/ carpet weaving/ handicraft.. They should not
be member of any industrial co-operative society and
should not be indebted to any cooperative of State Agency.
PURPOSE : The financial assistance should be for thepurchase of equipments, machinery, tools, etc. and also for
purchasing in-puts in a desired manner etc. and for
meeting working capital requirements. Loan is also
considered for construction of working shed.
EXTENT OF LOAN; Need based, subject to ceiling of Rs.25,000/- per borrower, by way of Term/ Composite
Loan.
MARGIN NIL
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MARGIN: NIL
RATE OF INTEREST: As per Loans & Advances
Circular No. 16/2009 dated 31st January, 2009
COLLATERAL SECURITY: Not Required.
Scheme for financing Housewives & other women
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Scheme for financing Housewives & other women
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• ELIGIBILITY: Women/ Housewife, 18 years of age and
above, living at a place for more than 6 months.• She should not be a member of any industrial co-operative
society and should not be indebted to any cooperative or state
agency.
• She should be well versed in the activity she proposes toundertake.
PURPOSE: The scheme is intended to enable housewives and
other ladies tu supplement family income and to use their spare
time profitability.
EXTENT OF LOAN: Need based, subject to ceiling of
Rs.25,000/- per borrower. (Term Loan/working captal)
MARGIN: NIL
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MARGIN: NIL
RATE OF INTEREST: As per Loans & Advances
Circular No. 16/2009 dated 31st January, 2009
COLLATERAL SECURITY: Not Required.
Scheme for financing Small Enterprise
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ELIGIBILITY: Micro, Small and Medium Enterprises - Enterprises
engaged in the manufacture or production, processing or
preservation of goods .
EXTENT OF LOAN: Need based finance is to be provided.• Small Enterprises units (new as well as old) having aggregate fund
based working capital limits upto Rs. 5.00 crore from the banking
system are to be provided working capital finance computed on the
basis of 20% of their annual turnover.
RATE OF INTEREST: As per Loans & Advances Circular No. 16/2009dated 31st January, 2009
COLLATERAL SECURITY: No collateral security or third party
guarantee should be taken for loans up to Rs. 100 lakh covered under
Credit Guarantee Scheme of CGTMSE. In terms of Loans & Advances
Circular No. 34 dated 7th March 2008 and PSLB/SME Circular No.55/2008 dated 6th August, 2008, permission of Circle Head be obtained
for accepting collateral security.
However, as per RBI guidelines, it is mandatory that no collateral
security iis to be obtained for loans upto Rs 5 lakh (new units of MSEs)
both Manufacturing and Service Sector.
• CREDIT REQUIREMENTS
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MEDIUM TERM LOAN: This is required by the entrepreneurs to
acquire fixed assets like land, factory building, plant and
machinery for setting up new enterprises. This is also provided for
expanding factory accommodation, renovating and modernizing theexisting factory with a view to improving the quality or reducing
production cost, creating additional infrastructure facilities,
like setting up of Research & Development Centres / TestingLaboratories and purchase of vehicle (other than the vehicles
meant for personal use) which are required exclusively to meetproduction and marketing needs of the unit etc.
COMPOSITE LOAN: Requiring loan up to Rs. 100.00 lakh) may be
met by way of composite loan, to cater to the need for both term
loan and working capital.
WORKING CAPITAL: This covers the cost of raw material,components, spares, stores, etc and processing of raw materials,
marketing of finished products, etc by way of bills purchased and
discounted and book debts etc (including pre-shipment and post-
shipment requirements).
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To provide hassle free financial support to Artisans and to make
credit delivery simple and easy
ELIGIBILITY:
All artisans involved in production/ manufacturing process (andotherwise eligible for credit facilities for carrying out the
proposed activities under any of the existing bank schemes)
would be eligible. Preference would be given to artisans
registered with Development Commissioner (Handicrafts) and Thrust in financing would be on clusters of artisans and
artisans who have joined to form Self Help Groups (SHGs).
NATURE OF LIMIT : Term Loan & Cash Credit Limit up to Rs.
2 lakh
• The Development Commissioner (Handicrafts) will pay/re-
imburse one time Guarantee money and Annual service fee
to bank for obtention of guarantee cover under creditguarantee scheme of CGTSI to facilitate flow of credit to the
Handicraft Artisans.
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PNB ARTISANS CREDIT CARD SCHEME
PNB LAGHU UDYAMI CREDIT CARD SCHEME
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To provide hassle free financial support to Small businessunits, Retail Traders, Artisans, Village Industries, Small Scale
Industrial Units, Small Scale Services & Business Enterprises(SSSBEs) and Tiny Units, Professionals and Self EmployedPersons, etc.
• ELIGIBILITY: Borrowers belonging to aforesaid categoriesenjoying Cash Credit limits upto Rs 10 lakh and whose dealingswith the bank have been satisfactory for the last three years are
eligible for issuance of Laghu Udyami Credit Card.• EXTENT OF LIMIT: CC limit Max.upto Rs 10 lakh
• ASSESSMENT OF CREDIT CARD LIMIT
• (i) For small business, retail traders, etc. 20% of the annualturnover,
• (ii) For professionals and self-employed persons, 50% of their
gross annual income as per Income Tax return.• (iii) For Small Scale Industrial Units, Small Scale Services &
Business Enterprises (SSSBEs) including tiny sector units theassessment norms in vogue as per the Nayak Committeerecommendations.
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PNB LAGHU UDYAMI CREDIT CARD SCHEME
PNB SME Sahayog Scheme: is a new product , designed to
meet the unforeseen expenditure of the small enterprises with
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meet the unforeseen expenditure of the small-enterprises with
excellent track record.
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ELIGIBILITY: The scheme is applicable to existing borrowers
whose accounts have been classified as standard assets as on 31
March for the last 3 consecutive years.
(ii)To begin with, this facility may be extended to the existing rated
borrowers enjoying credit limits above Rs.20 lakh.
(iii)For sanctioned limits (Term loan & working capital) of above
Rs.20 lakh, the threshold credit rating should be „BB' as on the
closing of previous financial year. However, credit risk rating for
any of the earlier years should not be below 'B'.
EXTENT OF LOAN: The eligible borrowers will be sanctioned aspecial credit limit for an amount equal to 20% of the aggregate
working capital limits (i.e. fund based and non fund based
separately) sanctioned to the unit, subject to a maximum of Rs.25
lakh.
PORPUSE: The limit can be utilized for contingencies
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PORPUSE: The limit can be utilized for contingencies
like additional purchase of raw materials including
packing materials/handling charges for the
execution of bulk orders, taking part innational/international trade exhibitions for creating
market base, payment of consultancy charges,repairs to machinery, labour payments, etc.
RATE OF INTEREST: As per Loans & AdvancesCircular No. 16/2009 dated 31st January, 2009
COLLATERAL SECURITY: Collateral security be obtained as
per bank's extant guidelines. The charge on available security by
way of primary/collateral to the existing sanctioned limits will be
extended to cover the clean cash credit limit.
PNB Green Scheme : CREDIT FACILITY TO SSIUNITS - Five per cent Green Credit Facility for
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clearance of statutory dues.
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ELIGIBILITY: All Micro & Small Enterprises units
PURPOSE: In order to meet payment of statutory duesexclusively like income tax, sales tax, excise duty and
other expenses like electricity charges, custom duties,
telephone expenses by SSI units in emergent
circumstances, bank will provide/ sanction 5% GreenCash Credit facility maximum upto Rs.1.00 lakh of
the fund based sanction limit/assessed permissible
bank finance, over & above adhoc facility or Credit
Facility availed by unit under PNB SME Sahayog. This
facility would be available to the MSEs of Standard
Category, who are banking with us for at least one
year. The facility will be allowed by the Incumbents Incharge
without referring the matter to higher authorities
Concessions Available to Micro & Small Enterprises
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Concessions Available to Micro & Small Enterprises
• No Collateral Security for Loans up to Rs. 100 lakh. As per RBI
guidelines- Non-obtention of collateral security in case of loans
upto Rs 5 lakh to be extended to all new units of Micro & Small
Enterprises both Manufacturing and Service Sector is
mandatory.
• Composite Loan Limit up to Rs. 100 lakh.
• Simplified Loan Application Forms for Loans up to Rs. 50 lakh.
• No Processing/Upfront fee for loans up to Rs. 2 lakh.• Interest concessions in the range of 0.25% to 0.50% for SMERA
& CRISIL rated borrowers.
• Financing of Pre-operative expenses, where no tangible primary
security is being created, be considered to Small Enterprises
not exceeding 10% of the project cost, within the total financingof the project. Further, it should be ensured that security
created out of loan amount and other collateral securities etc
are adequate to cover such pre-operative expenses.
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NEF SCHEME- Soft Loan Assistance
OBJECTIVE : The objective of NEF Scheme is to provide
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OBJECTIVE : The objective of NEF Scheme is to provide
equity type support to entrepreneurs for setting up new
projects in tiny/small scale sector, for undertaking
expansion, modernisation, technology upgradation anddiversification by existing tiny, SSI and service
enterprises and for rehabilitation of viable sick units in
the SSI Sector which fulfill the specified eligibility criteria,
irrespective of location.
ELIGIBILITY CRITERIA: All new and existingManufacturing & service enterprises excluding SRTO.
Assistance to Service Enterprises liked with acquisition
for fixed assets only.
AMOUNT OF ASSISTANCE: Amount as may be required tomeet the gap in equity as per prescribed debt equity
norm, after taking into account promoters’ contribution,
subject to a maximum of 25% of project cost or Rs.10.00
lakh per project, whichever is lower.
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PROJECT COST
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PROJECT COST
• Project cost (including margin money for working
capital) should not exceed Rs.50 lakh in the case of
new projects. In the case of existing units andservice enterprises, the total outlay, including the
proposed outlay on expansion/
modernisation/technology upgradation/
diversification of rehabilitation should not exceedRs.50 lakh.
• PROMOTER’S CONTRIBUTION : Minimum 10% of
the project cost.
• DEBT EQUITY RATIO: 65:35 or 1.857:1 (excludingState Investment Subsidy). However, a flexible
approach may be followed in the case of
rehabilitation proposals.
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Mahila Udyam Nidhi Yojana
OBJECTIVE T id ft l (Q i it ) i t
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OBJECTIVE: To provide soft loan (Quasi equity) assistance
to women entrepreneurs besides usual term loans for
setting up industrial units in the small scale and tiny sector
and undertaking service activities eligible for assistanceunder refinance scheme.
ELIGIBILITY : a) New projects in tiny and small scale
sectors for manufacture, preservation or processing of
goods [Tiny enterprises would include all industrial units
and service industries (except Road Transport Operators)
satisfying the investment ceiling prescribed for micro
enterprises].
b) Existing tiny and small scale industrial units and
service enterprises as mentioned above [including thosewhich have availed of MUN assistance earlier], undertaking
expansion, modernisation, technology upgradation and
diversification.
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NATURE AND EXTENT OF ASSISTANCE: Soft
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NATURE AND EXTENT OF ASSISTANCE: Soft
loan upto 25% of the project cost with a ceiling of Rs
2.50 lakh per project to meet the gap in equity as per
prescribed Debt Equity Ratio(DER) of 1.857:1(excluding State subsidy which may be retained for
meeting working capital) after taking into account the
promotors’ own contribution equivalent to 10% of the
project cost.PROJECT OUTLAY: Project cost(including margin
money for working capital) should not exceed Rs 10.00
lakh in case of new projects. In the case of existing
units and service enterprises, the outlay on expansion
/ modernisation / technology upgradation, or
diversification or rehabilitation should not exceed Rs
10.00 lakh per project.
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83
CREDIT
GUARANTEE
FUND T RUST SCHEME
FORMICRO & SMALL
ENTERPRISES
SALIENT FEATURES - CGTMSE
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• Facilitates availment of credit by ALL NEW AND
EXISTING MICRO AND SMALL ENTERPRISES(BOTH IN THE MANUFACTURING SECTOR AS
WELL AS IN THE SERVICE SECTOR) except
advances to Retail Trade & EducationalInstitutions) from formal banking channel purely on
the viability of the projects.
• Maximum loan guaranteed by CGTMSE is Rs.100
lakh per Micro & Small Enterprises unit for fund
based & Non Fund Based facilities. However, the
loan amount may be more than Rs 100 lakh
• Amount in default of a borrowing unit is shared
between CGTMSE and the Lender in the ratio of 3:1
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ADDITIONAL CREDIT FACILITIES –
Eligible for Credit Guarantee Cover
• The additional credit facilities sanctioned upto
Rs. 100 lakh per borrower, subsequently,
without collateral security and / or third party
guarantee to such Micro & Small Enterprises
units, can be covered under the GuaranteeScheme.
• The decision to release the collateral security
and / or third party guarantee in respect of the
existing credit facilities extended to the eligibleSSI units have been left to the discretion of the
respective bank / lending institution (MLI).
d C d
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Mandatory Coverage under
CGTMSEBank has made it mandatory to extend collateral
free/without third party guarantee loans up to Rs.
100 lakh by the branches.
Branch Managers are not empowered to accept
Collaterals/Third Party Guarantee for extending
loans up to Rs. 100 lakh. Next Higher authority
only i.e. Circle Head can permit acceptance of thirdparty guarantee/ Collaterals in exceptional
circumstances.
EXTENT OF GUARANTEE COVER
Th T h ll id d
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The Trust shall provide guarantee as under;
w.e.f. 8th December, 2008
17 April 2012 87
Category Maximum extent of guarantee where credit facility is
Upto Rs 5
lakh
Above Rs 5 lakh
upto Rs 50 lakh
Above Rs 50 lakh upto Rs
100 lakh
Micro enterprises 85%
Rs 4 .25 lakh
75%
Rs 37.50 lakh
Rs 37.50 lakh plus 50% of
amount in default above Rs
50 lakh subject to overall
ceiling of Rs 62.50 lakh
Women
entrepreneurs /
Units located in
North East
Region (incl.
Sikkim)
80% of the amount in default
subject to maximum of Rs 40
lakh
R 40 lakh plus 50% of
amount in default above Rs
50 lakh subject to overall
ceiling of Rs 65 lakh.
All other category
of borrowers
75% /Rs 37.50 lakh Rs 37.50 lakh plus 50% of
amount in default above Rs
50 lakh subject to overall
ceiling of Rs 62.50 lakh.
Tenure of Guarantee
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– The guarantee cover shall run through thetenure of the term credit / composite credit
– Where working capital alone is financed – 5years; to be renewed thereafter. The guaranteecover will commence from the date of payment of guarantee fee.
Guarantee fee & Annual Service ChargesOne time
Guarantee Fee
Annual Service
Fee
For loans up to Rs. 5 lakh 1.00% 0.50%
Loans above Rs. 5 lakh 1.50% 0.75%
Loans up to Rs. 100 lakh
sanctioned to units in
North Eastern states
0.75% -
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Incentives to banks
CGTMSE guaranteed loans carry
– Zero per cent risk weight – Zero per cent provisions
RBI Circular DBOD BP.BC.128/2.04.048/00-01 dated June 7,2001
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TECHNOLOGYUPGRADATION SCHEME
FORSMALL ENTERPRISES
SECTOR
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CREDIT LINKED CAPITAL SUBSIDY SCHEME FOR TECHNOLOGY
UPGRADATION OF THE SMALL MANUFACTURING ENTERPRISES
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(MINISTRY OF MSME-GOI)
• The scheme aims at facilitating technology upgradation by
providing 15% upfront capital subsidy to SSI units, including
tiny. khadi, village and coir industrial units on institutionalfinance availed of by them for introduction of well established and
improved technologies in the specified sub sectors/products
approved under the scheme like Bio-tech Industry, Dyes &
Intermediates, Food processing, Glass & Ceramic Items, Auto Parts
& components, Forging & Hand Tools, Foundries, Sports Goods,Cosmetics, Readymade Garments, Paints, Agricultural implements
etc. the scheme covers 45 products/sub sector in SSI/SE Sector.
• The maximum limit of eligible loan under the revised scheme is Rs.
100 Lakh. Accordingly, the ceiling on subsidy would be Rs. 15
Lakh or 15% of the investment in eligible plant and machinery (i.e.
purchase price of plant & machinery) whichever is lower.
• The scheme was in operation up to March 31, 2012.
• Our bank has been appointed as Nodal agency for release of
incentives w.e.f 4th April 2006 for release of subsidy under the
CLCSS.(List of the eligible products/by products)
91
Approved list of Well Established and Improved
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pp p
Technologies under the CLCSS)i) Bio-tech Industry
ii) Common Effluent Treatment Plant
iii) Corrugated Boxesiv) Drugs and Pharmaceuticals v) Dyes and Intermediates
vi) Industry based on Medicinal and Aromatic plants
vii) Plastic Moulded/ Extruded Products and Parts/ Components
viii) Rubber Processing including Cycle/ Rickshaw Tyres
ix) Food Processing (including Ice Cream manufacturing)
x) Poultry Hatchery & Cattle Feed Industry xi) Dimensional Stone Industry (excluding Quarrying and mining)
xii) Glass and Ceramic Items including Tiles
xiii) Leather and Leather Products including Footwear and Garments
xiv) Electronic equipment viz test, measuring and assembly/
manufacturing, Industrial process control; Analytical, Medical, Electronic
Consumer & Communication equipment etc.
xv) Fans & Motors Industry xvi) General Light Service(GLS) Lamps
xvii) Information Technology (Hardware)
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xviii) Mineral Filled Sheathed Heating Elements
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) g
xxix) Transformer/ Electrical Stampings/ Laminations /Coils/Chokes
including Solenoid coils xx) Wires & Cable Industry
xxi) Auto Parts and Components
xxii) Bicycle Parts
xxiii) Combustion Devices/ Appliances
xxiv) Forging & Hand Tools
xxv) Foundries – Steel and Cast Iron
xxvi) General Engineering Works
xxvii) Gold Plating and Jewellery
xxviii) Locksxxix) Steel Furniture
xxx) Toys
xxxi) Non-Ferrous Foundry
xxxii) Sport Goods
xxxiii) Cosmetics
xxxiv) Readymade Garments
xxxv) Wooden Furniture
xxxvi) Mineral Water Bottle
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xxxvii) Paints, Varnishes, Alkyds and Alkyd products
xxxviii) Agricultural Implements and Post Harvest Equipment xxxix) Beneficiation of
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xxxviii) Agricultural Implements and Post Harvest Equipment xxxix) Beneficiation of
Graphite and Phosphate
xxxx) Khadi and Village Industries
xxxxi) Coir and Coir Products xxxxii) Steel Re-rolling and /or Pencil Ingot making
Industriesxxxxiii) Zinc Sulphate
xxxxiv) Welding Electrodes
xxxxv) Sewing Machine Industry
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TECHNOLOGY UPGRADATION FUND SCHEME
(TUFS) FOR TEXTILE AND JUTE SECTOR
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(TUFS) FOR TEXTILE AND JUTE SECTOR The Scheme provide encouragement to textile industrial units in the Small
Enterprises/SSI sector for taking up technology upgradation and to
modernise their production facilities. SCOPE OF THE SCHEME
The following activities will be covered under TUF:
1. Cotton ginning and pressing;
2. Textile industry covering:; Silk reeling and twisting; Wool scouring and
combing; Synthetic filament yarn texturising, crimping and twisting;Spinning; Viscose Filament Yarn (VFY); Weaving, knitting including
non-wovens, fabric embroidery and technical textiles; Garment/made
up manufacturing; Processing of fibres, yarns, fabrics, garments and
made ups and Viscose Staple Fibre (VSF) .
3. Jute Industry.
ELIGIBLE BORROWERS
• Sole Proprietorships, partnerships, Co-operative Societies, Private and
Public Limited Companies
9517 April 2012
CAPITAL SUBSIDY SCHEME (CLCSS-TUFS) FOR SSI
F S ll S l T til d J t I d t i l U it ti t il f
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• For Small Scale Textile and Jute Industrial Units, an option to avail of
either 15% (25% for Handloom Sector) Credit Linked Capital
Subsidy (CLCS) or 5% interest reimbursement subject to a capital
ceiling of Rs. 200 Lakh and ceiling on margin money subsidy of Rs.15Lakh (capital ceiling of Rs. 80 Lakh and ceiling on margin money
subsidy of Rs.20 Lakh for Handloom Sector).
TEXTILE PROCESSING MACHINERY UNITS having specified machinery
for Processing, Garmenting and Technical textiles have the option to
obtain incentives as above or alternatively they can claim 10 percent
capital subsidy in addition to 5 percent interest subsidy.
POWERLOOM SECTOR
• For Small Scale Power loom Units, have an additional option of
availing credit linked 20% capital subsidy for Power loom and weaving
preparatory machinery, up to a cost of Rs 200 lakh and ceiling onmargin money subsidy Rs.20 Lakh.
The incentive is directly passed by Office of Textile Commissioner,
Mumbai
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cont…..
• District-wise project profiles – With a view to obviate the
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• District-wise project profiles – With a view to obviate the
need for detailed project reports with every proposal, common
industrial activities prevailing in a district are being identified
for preparation of standard project reports.• On Time Settlement Policy for SME sector for recovery of non-
performing loans has been implemented.
• Our Bank has developed the Scoring Models for SME
advances for loans upto Rs 50 lakh and we are in this
process to develop the models for advances upto Rs 2 crore.• Our Bank has simplified application-cum-sanction form for
loans upto Rs 50 lakh as advised by IBA and requested IBA
to standardize simplified loan application form for loans upto
Rs 1 crore working capital loan limit under Nayak Committee
at the industry level• The banks has considered to provide CC/OD limit against
stock and receivables under one facility.
• Our Bank is shortly starting a subsidiary for undertaking the
factoring services.
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Thanks……………
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OTHER SME
SCHEMES
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SUPPLY CHAIN FINANCING PRODUCT OBJECTIVE : To leverage the strength of Reputed Manufacturing
C i (RMC ) d b d h i d i id fi
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Companies (RMCs) and based on their recommendations, provide finance
both to suppliers (vendors) and buyers (dealers).
PURPOSE ;
• To provide Bill Discounting Facility to the selected Vendors for receivingtimely & instant payments from the RMCs; and
• To provide Bill Discounting Facility OR Overdraft Facility to the selected
Dealers to finance their procurement of goods from the RMCs.
• ELIGIBILITY : Finance under the scheme shall be granted to
Vendors/Dealers based on the opinion and recommendation of RMC.Circle Office will carry out its due diligence exercise for selection of vendors and dealers to its satisfaction.
• NATURE OF FACILITY
• i) In the shape of Bill Discounting facility (Appendix-I):
• Vendor Bill Discounting and Dealer Drawee Bill Discounting OR
• ii) Overdraft facility (Appendix-II): Dealer Overdraft Facility.
• The period of sanction will be for 12 months.
• The Dealer shall render option for one facility i.e. Either DraweeBill discounting facility Or Overdraft facility.
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L&A Circular No.. 64/2008
PNB – SSI URJA SCHEME /
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• SCHEME FOR FINANCING - PURCHASE OF NEW/OLD
DIESEL GENERATING SETS WITH OR WITHOUTACOUSTIC ENCLOSURES : To provide adequate & timely
financial support from the banking system to the abovecategories of entrepreneurs who have shown commitment
to run their SSI unit successfully, a new eco &
entrepreneurs friendly credit product namely PNB SSI
URJA SCHEME has been formulated. Under this scheme
financial assistance for purchase of New/Old DieselGenerating Sets with or without acoustic enclosure for
controlling noise pollution will be provided to the existing
& new borrowers/units.
EXTENT OF LIMIT: Need based. NATURE OF LIMIT: Term Loan
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SCHEME – PNB GARRAGE YOJANA.
(Scheme for financing under Small Scale Industry
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(Scheme for financing under Small Scale Industry
Related Service/Business enterprises) SSI
• To encourage existing Small industry related
service/business enterprises/units having investment infixed assets upto Rs 10.00 lakh, to modernise theirservices facilities and adopt improved and updatedtechnology so as to strengthen their work capabilities.
• Small industry related service/business enterprises
registered in any part of the country, without any locational restriction (including cities/metropolitanareas/ village/town irrespective of its population) havinginvestment in fixed assets upto Rs 10.00 lakh would beeligible under the scheme.
• PROJECT COST : The project outlay on fixed assets
already created & items indicated above should not exceed Rs 10 lakh.
• Assistance under the scheme for Term Loan (Within theprescribed ceiling) & working Capital will be need based.