1. What is meant by Priority Sector?

Priority sector refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Typically, these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections. 2. What are the different categories under priority sector? Priority Sector includes the following categories: (i !griculture (ii "icro and Small #nterprises (iii #ducation (iv $ousing (v #%port &redit (vi 'thers 3. What are the Targets and Sub-targets for banks under priority sector? Categories omestic commercia! banks " #oreign banks $ith 2% and abo&e branches '(s percent of ()*C or Credit +,ui&a!ent of -ff-*a!ance Sheet +.posure/ $hiche&er is higher0 () ,,) #oreign banks $ith !ess than 2% branches '(s percent of ()*C or Credit +,ui&a!ent of -ff-*a!ance Sheet +.posure/ $hiche&er is higher0 *+ .o specific target. .o specific target.

Total Priority Sector Total agriculture !dvances to /eaker Sections 1. What constitutes 2 irect #inance2 for (gricu!tura! Purposes?

(i 0oans to individual farmers 1including Self $elp 2roups (S$2s or 3oint 0iability 2roups (302s , i.e. groups of individual farmers4 engaged in !griculture and !llied !ctivities, viz., dairy, fishery, animal husbandry, poultry, bee5 keeping and sericulture. (ii 0oans to small and marginal farmers for purchase of land for agricultural purposes. (iii 0oans to distressed farmers indebted to non5institutional lenders. (iv 6ank loans to Primary !gricultural &redit Societies (P!&S , 7armers8 Service Societies (7SS and 0arge5si9ed !divasi "ulti Purpose Societies (0!"PS ceded to or managed: controlled by such banks for on lending to farmers for agricultural and allied activities. 3. What constitutes 24ndirect #inance2 to (gricu!ture? (i 0oans to corporates, partnership firms and institutions engaged in !griculture and !llied !ctivities (dairy, fishery, animal husbandry, poultry, bee5keeping and sericulture .

(ii 0oans upto `; crore to Producer &ompanies set up e%clusively by only small and marginal farmers under Part <=! of &ompanies !ct, ,>;? for agricultural and allied activities. (iii 6ank loans to Primary !gricultural &redit Societies (P!&S , 7armers8 Service Societies (7SS and 0arge5si9ed !divasi "ulti Purpose Societies (0!"PS . 5. What constitutes 6icro and Sma!! +nterprises under priority sector? 6ank loans to "icro and Small "anufacturing and Service #nterprises, provided these units satisfy the criteria for investment in plant machinery:equipment as per "S"#@ !ct +))?. 6anufacturing sector +nterprises "icro #nterprises Small #nterprises +nterprises "icro #nterprises Small #nterprises 4n&estment in p!ant and machinery @o not e%ceed twenty five lakh rupees "ore than twenty five lakh rupees but does not e%ceed five crore rupees 4n&estment in e,uipment @oes not e%ceed ten lakh rupees "ore than ten lakh rupees but does not e%ceed two crore rupees

7. What is the !oan !imit for education under priority sector? 0oans to individuals for educational purposes including vocational courses upto `,) lakh for studies in <ndia and `+) lakh for studies abroad are included under priority sector. 8. What is the !imit for housing !oans under priority sector? 0oans to individuals up to `+; lakh in metropolitan centres with population above ten lakh and `,; lakh in other centres for purchase:construction of a dwelling unit per family e%cluding loans sanctioned to bank8s own employees. 9. What is inc!uded under Weaker Sections under priority sector? Priority sector loans to the following borrowers are considered under /eaker Sections category:5 (a Small and marginal farmersA (b !rtisans, village and cottage industries where individual credit limits do not e%ceed `;),)))A (c 6eneficiaries of SwarnBayanti 2ram Swaro9gar CoBana (S2SC , now .ational Dural 0ivelihood "ission (.D0" A (d Scheduled &astes and Scheduled TribesA (e 6eneficiaries of @ifferential Date of <nterest (@D< schemeA (f 6eneficiaries under Swarna 3ayanti Shahari Do9gar CoBana (S3SDC A (g 6eneficiaries under the Scheme for Dehabilitation of "anual Scavengers (SD"S A (h 0oans to Self $elp 2roupsA (i 0oans to distressed farmers indebted to non5institutional lendersA

(B 0oans to distressed persons other than farmers not e%ceeding `;),))) per borrower to prepay their debt to non5 institutional lendersA (k 0oans to individual women beneficiaries upto ` ;),))) per borrowerA 1%. What is the rate of interest for !oans under priority sector? The rate of interest on various priority sector loans will be as per D6<8s directives issued from time to time, which is linked to 6ase Date of banks at present. Priority sector guidelines do not lay down any preferential rate of interest for priority sector loans

Q.1. What is the definition of MSME? A.1. The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 200 in terms of !hich the definition of micro, small and medium enterprises is as under" (a) Enterprises engaged in the manufacture or production, processing or preservation of goods as specified be o!" (i) A micro enterprise is an enterprise !here investment in plant and machiner# does not e#ceed $s. %& a'h( (ii) A sma enterprise is an enterprise !here the investment in plant and machiner# is more than $s. %& a'h but does not e#ceed $s. & crore( and (iii) A medium enterprise is an enterprise !here the investment in plant and machiner# is more than $s.& crore but does not e#ceed $s.1) crore. In case of the a$ove enterprises, investment in plant and machiner# is the ori%inal cost e&cludin% land and $uildin% and the items specified $# the Ministr# of Small Scale Industries vide its notification 'o(S()(*+22(E) dated )cto$er ,, 200 (Anne& I). (b) Enterprises engaged in providing or rendering of services and !hose investment in e-uipment (ori%inal cost e&cludin% land and $uildin% and furniture, fittin%s and other items not directl# related to the service rendered or as ma# $e notified under the MSMED Act, 200 are specified $elo!( i( ii( A micro enterprise is an enterprise !here the investment in e-uipment does not e#ceed $s. 1) a'h. A sma enterprise is an enterprise !here the investment in e-uipment is more than $s.1) a'h but does not e#ceed $s. % crore. and

iii(

A medium enterprise is an enterprise !here the investment in e-uipment is more than $s. % crore but does not e#ceed $s. & crore(

Q.%.What is the status of ending b* ban's to this sector? A.%. /an01s lendin% to the Micro and Small Enterprises is rec0oned for priorit# sector advances( 2endin% to Medium enterprises is not eli%i$le to $e included for the purpose of computation of priorit# sector lendin%( Detailed %uidelines on lendin% to the Micro, Small and Medium enterprises sector are availa$le in our Master 3ircular no. 453D(SME 6 '7S( /3( 'o( 0890 (02(:*920**;*2dated <ul# *, 20**( The Master circulars issued $# 4/I, to $an0s, on various matters are availa$le on our !e$site !!!(r$i(or%(inand updated in <ul# each #ear( Q.+.What is meant b* ,riorit* Sector -ending? A.+. 5riorit# sector lendin% include onl# those sectors as part of the priorit# sector, that impact lar%e sections of the population, the !ea0er sections and the sectors !hich are emplo#ment; intensive such as a%riculture, and tin# and small enterprises( Detailed %uidelines on 5riorit# sector lendin% are availa$le in our Master 3ircular on 5riorit# sector lendin% no.453D(3)(5lan(/3 *0 90=(08(0*9 20**;*2 dated <ul# *, 20**( The Master circulars issued $# 4/I, to $an0s, on various matters are availa$le on our !e$site !!!(r$i(or%(in and updated in <ul# each #ear( Q... What is the status of oans granted to /hadi and 0i age 1ndustries Sector (/01)? A... All advances %ranted to units in the >?I sector, irrespective of their si@e of operations, location and amount of ori%inal investment in plant and machiner# !ill $e treated as loans to the micro enterprises se%ment !ithin the MSE Sector and covered under priorit# sector advances( Q.&. Are there an* targets prescribed for ending b* ban's to MSMEs? A.&. As per e&tant polic#, certain tar%ets have $een prescri$ed for $an0s for lendin% to the Micro and Small enterprise (MSE) sector( The tar%ets for domestic $an0s and forei%n $an0s are sli%htl# different 0eepin% in mind the limited presence of the forei%n $an0s( The domestic commercial $an0s are e&pected to enlar%e credit to priorit# sector and ensure that priorit# sector advances (!hich include the micro and small enterprises sector) constitute =0 per cent of AdAusted 'et /an0 3redit (A'/3) or credit e-uivalent amount of )ff;/alance Sheet E&posure, !hichever is hi%her( A 5rime Minister1s Tas0 7orce !as set up in 2008 $# Government of India (3hairman"Shri T(>(A( 'air, 5rincipal Secretar#) to loo0 into the various issues pertainin% to MSMEs( In terms of the recommendations of the Tas0 7orce $an0s have $een advised to achieve a 20 per cent #ear;on;#ear %ro!th in credit to micro and small enterprises and a *0 per cent annual %ro!th in the num$er of micro enterprise accounts (4efer circular 453D(SME 6 '7S('o(/3(8090 (02(:*92008;*0 dated <une 28, 20*0)(

In order to ensure that sufficient credit is availa$le to micro enterprises !ithin the MSE sector, $an0s should ensure that" (a) =0 per cent of the total advances to MSE sector should %o to micro (manufacturin%) enterprises havin% investment in plant and machiner# up to 4s( , la0h and micro (service) enterprises havin% investment in e-uipment up to 4s( 2 la0h . ($) 20 per cent of the total advances to MSE sector should %o to micro (manufacturin%) enterprises !ith investment in plant and machiner# a$ove 4s( , la0h and up to 4s( 2, la0h, and micro (service) enterprises !ith investment in e-uipment a$ove 4s( 2 la0h and up to 4s( *0 la0h( Thus, 0 per cent of MSE advances should %o to the micro enterprises( (c) Bhile $an0s are advised to achieve the 0C tar%et as a$ove, the allocation of 0C of the MSE advances to the micro enterprises is to $e achieved in sta%es vi@( ,0C in the #ear 20*0;**, ,,C in the #ear 20**;*2 and 0C in the #ear 20*2;*: (4efer circular 453D(SME 6 '7S('o(/3(8090 (02(:*92008;*0 dated <une 28, 20*0)( 7or 7orei%n $an0s the tar%ets are the same e&cept that 7orei%n $an0s are e&pected to enlar%e credit to priorit# sector and ensure that priorit# sector advances (!hich includes the MSE sector) constitute :2 per cent of AdAusted 'et /an0 3redit (A'/3) or credit e-uivalent amount of )ff; /alance Sheet E&posure, !hichever is hi%her( Bithin the overall tar%et of :2 per cent to $e achieved $# forei%n $an0s, the advances to MSE sector should not $e less than *0 per cent of the adAusted net $an0 credit (A'/3) or credit e-uivalent amount of )ff;/alance Sheet E&posure, !hichever is hi%her( 7or details, the Master 3ircular 453D(SME 6 '7S( /3( 'o( 0890 (02(:*920**;*2 dated <ul# *, 20** on D2endin% to Micro, Small and Medium Enterprises (MSME) Sector, ma# please $e seen( Q.2. Are there specia i3ed ban' branches for ending to the MSMEs? A.2. 5u$lic sector $an0s have $een advised to open at least one speciali@ed $ranch in each district( The $an0s have $een permitted to cate%ori@e their MSME%eneral $an0in% $ranches havin% 0C or more of their advances to MSME sector, as speciali@ed MSME $ranches for providin% $etter service to this sector as a !hole( As per the polic# pac0a%e announced $# the Government of India for steppin% up credit to MSME sector, the pu$lic sector $an0s !ill ensure speciali@ed MSME $ranches in identified clusters9centres !ith preponderance of small enterprises to ena$le the entrepreneurs to have eas# access to the $an0 credit and to e-uip $an0 personnel to develop re-uisite e&pertise( Thou%h their core competence !ill $e utili@ed for e&tendin% finance and other services to MSME sector, the# !ill have operational fle&i$ilit# to e&tend finance9render other services to other sectors9$orro!ers( Q.4. 5o! man* such specia i3ed branches for ending to MSMEs are there? A.4( As on March 20** there are *220 speciali@ed MSME $ranches( Q.6. 5o! do ban's assess the !or'ing capita re7uirements of borro!ers?

A.6. The $an0s have $een advised to put in place loan policies %overnin% e&tension of credit facilities for the MSE sector dul# approved $# their /oard of Directors (4efer circular 453D(SME 6 '7S(/3('o(*0290 (0=(0*9200E;08 dated Ma# =, 2008)( /an0s have, ho!ever, $een advised to sanction limits after proper appraisal of the %enuine !or0in% capital re-uirements of the $orro!ers 0eepin% in mind their $usiness c#cle and short term credit re-uirement( As per 'a#a0 3ommittee 4eport, !or0in% capital limits to SSI units is computed on the $asis of minimum 20C of their estimated turnover up to credit limit of 4s(,crore( 7or more details para%raph =(*2(2 of the Master 3ircular on lendin% to the MSME sector dated <ul# *, 20*0 ma# please $e seen( Q.8. 1s there an* provision for grant of composite oans b* ban's? A.8. A composite loan limit of 4s(*crore can $e sanctioned $# $an0s to ena$le the MSME entrepreneurs to avail of their !or0in% capital and term loan re-uirement throu%h Sin%le Bindo! in terms of our Master 3ircular on lendin% to the MSME sector dated <ul# *, 20*0( All scheduled commercial $an0s !ere advised $# our circular 453D(SME6'7S( /3('o(*0290 (0=(0*9200E;08 on Ma# =, 2008 that the $an0s !hich have sanctioned term loan sin%l# or Aointl# must also sanction !or0in% capital (B3) limit sin%l# (or Aointl#, in the ratio of term loan) to avoid dela# in commencement of commercial production there$# ensurin% that there are no cases !here term loan has $een sanctioned and !or0in% capital facilities are #et to $e sanctioned( These instructions have $een reiterated to scheduled commercial $an0s on March **, 20*0( Q.1).What is 9 uster financing? A.1). 3luster $ased approach to lendin% is intended to provide a full;service approach to cater to the diverse needs of the MSE sector !hich ma# $e achieved throu%h e&tendin% $an0in% services to reco%ni@ed MSE clusters( A cluster $ased approach ma# $e more $eneficial (a) in dealin% !ith !ell;defined and reco%ni@ed %roups ($) availa$ilit# of appropriate information for ris0 assessment (c) monitorin% $# the lendin% institutions and (d) reduction in costs( The $an0s have, therefore, $een advised to treat it as a thrust area and increasin%l# adopt the same for SME financin%( Fnited 'ations Industrial Development )r%anisation (F'ID)) has identified :EE clusters spread over 2* states in various parts of the countr#( The Ministr# of Micro, Small and Medium Enterprises has also approved a list of clusters under the Scheme of 7und for 4e%eneration of Traditional Industries (S7F4TI) and Micro and Small Enterprises 3luster Development 5ro%ramme (MSE;3D5) located in *2* Minorit# 3oncentration Districts( Accordin%l#, $an0s have $een advised to ta0e appropriate measures to improve the credit flo! to the identified clusters of micro and small entrepreneurs from the Minorities 3ommunities residin% in the minorit# concentrated districts of the countr#( /an0s have also $een advised that the# should open more MSE focussed $ranch offices at different MSE clusters !hich can also act as counsellin% centres for MSEs( Each lead $an0 of the district ma# adopt at least one cluster (4efer circular 453D(SME 6 '7S('o(/3(8090 (02(:*92008;*0 dated <une 28, 20*0)

Q.11. 1s there a time frame for disposa of oan app ications made b* the micro sma enterprises? A. 11. /an0s have $een advised to dispose of all loan applications for MSE $orro!ers up to a credit limit of 4s( 2,,0009;, !ithin 2 !ee0s and those up to 4s(, la0h !ithin = !ee0s provided the loan applications are complete in all respects and accompanied $# a Dchec0 listD (4efer Master 3ircular 453D(SME 6 '7S( /3( 'o( 0890 (02(:*920**;*2 dated <ul# *, 20** on D2endin% to Micro, Small and Medium Enterprises (MSME) Sector)( Q.1%. What are the $:1 guide ines on interest rates for oans disbursed b* the commercia ban's? A.1%. As part of the financial sector li$eralisation, all credit related matters of $an0s includin% char%in% of interest have $een dere%ulated $# 4/I and are %overned $# the $an0sD o!n lendin% policies( Bith a vie! to enhancin% transparenc# in lendin% rates of $an0s and ena$lin% $etter assessment of transmission of monetar# polic#, all scheduled commercial $an0s had $een advised in terms of our circular D/)D('o(Dir(/3(EE9*:(0:(0092008;*0 on April 8, 20*0 to introduce the /ase 4ate s#stem !(e(f( <ul# *, 20*0( Accordin%l#, the /ase 4ate S#stem has replaced the /524 s#stem !ith effect from <ul# *, 20*0( All cate%ories of loans should henceforth $e priced onl# !ith reference to the /ase 4ate( It is e&pected that the a$ove dere%ulation of lendin% rate !ill increase the credit flo! to small $orro!ers at reasona$le rate( Q.1+. 9an the MSE borro!ers get co atera free oans from ban's? A.1+. In terms of %uidelines contained in circular 453D(SME6'7S(/3('o(* 90 (02(:*(5)92008;*0 dated Au%ust 2=, 2008 issued $# 4eserve /an0 of India, $an0s have $een mandated to %rant collateral free loans upto 4s(, la0h to all MSE $orro!ers( /an0s have $een further advised vide our circular 453D952'7S9/3('o(:890 (02(E09200:;0= dated 'ovem$er :, 200: that the# ma#, on the $asis of %ood trac0 record and financial position of the SSI ('o! MSE) units, increase the limit of dispensation of collateral re-uirement for loans from the e&istin% level of 4s(*, la0h to 4s(2, la0h !ith the approval of the appropriate authorit#( In terms of our circular 453D(SME6'7S(/3('o(+890 (02(:*92008;*0 dated Ma# , 20*0, the limit of collateral free loans to MSE $orro!ers has $een increased from 4s(, la0h to 4s( *0 la0h $ased on the recommendations of the Bor0in% Group to revie! the 3redit Guarantee Scheme of the 3redit Guarantee 7und Trust for Micro and Small Enterprises (3hairman" Shri ?(>(Sharma, E&ecutive Director, 4eserve /an0 of India) Q.1.. What is the 9redit ;uarantee <und =rust Scheme for MSEs? A.1.. The Ministr# of MSME, Government of India and SID/I set up the 3redit Guarantee 7und Trust for Micro and Small Enterprises ( 3GTMSE) !ith a vie! to facilitate flo! of credit to the MSE sector !ithout the need for collaterals9 third part# %uarantees( The main o$Aective of the scheme is that the lender should %ive importance to proAect via$ilit# and secure the credit facilit# purel# on the primar# securit# of the assets financed( The 3redit Guarantee scheme (3GS) see0s

to reassure the lender that, in the event of a MSE unit, !hich availed collateral; free credit facilities, fails to dischar%e its lia$ilities to the lender, the Guarantee Trust !ould ma0e %ood the loss incurred $# the lender up to E, per cent of the outstandin% amount in default( The 3GTMSE !ould provide cover for credit facilit# up to 4s( *00 la0h !hich have $een e&tended $# lendin% institutions !ithout an# collateral securit# and 9or third part# %uarantees( A %uarantee and annual service fee is char%ed $# the 3GTMSE to avail of the %uarantee cover( 5resentl# the %uarantee fee and annual service char%es are to $e $orne $# the $orro!er( Q.1&. Wh* is credit rating of the micro sma borro!ers necessar*? A.1&. Bith a vie! to facilitatin% credit flo! to the MSME sector and enhancin% the comfort; level of the lendin% institutions the MSME units credit ratin% done $# reputed credit ratin% a%encies should $e encoura%ed( /an0s are advised to consider these ratin%s as per availa$ilit# and !herever appropriate structure their rates of interest dependin% on the ratin%s assi%ned to the $orro!in% SME units( Q.12. 1s credit rating mandator* for the MSE borro!ers? A.12. 3redit ratin% is not mandator# $ut it is in the interest of the MSE $orro!ers to %et their credit ratin% done as it !ould help in credit pricin% of the loans ta0en $# them from $an0s( Q.14. What are the guide ines for de a*ed pa*ment of dues to the MSE borro!ers? A.14. Bith the enactment of the Micro, Small and Medium Enterprises Development (MSMED), Act 200 , for the %oods and services supplied $# the MSEME units pa#ments have to $e made $# the $u#ers as under" (i) The $u#er to ma0e pa#ment on or $efore the date a%reed on $et!een him and the supplier in !ritin% or, in case of no a%reement $efore the appointed da#( The a%reement $et!een seller and $u#er shall not e&ceed more than =, da#s( (ii) The $u#er fails to ma0e pa#ment of the amount to the supplier, he shall $e lia$le to pa# compound interest !ith monthl# rests to the supplier on the amount from the appointed da# or, on the date a%reed on, at three times of the /an0 4ate notified $# 4eserve /an0( (iii) 7or an# %oods supplied or services rendered $# the supplier, the $u#er shall $e lia$le to pa# the interest as advised at (ii) a$ove( (iv) In case of dispute !ith re%ard to an# amount due, a reference shall $e made to the Micro and Small Enterprises 7acilitation 3ouncil, constituted $# the respective State Government( To ta0e care of the pa#ment o$li%ations of lar%e corporate $orro!ers to MSEs, $an0s have $een advised that !hile sanctionin%9rene!in% credit limits to their lar%e corporate $orro!ers (i(e( $orro!ers enAo#in% !or0in% capital limits of 4s( *0 crore and a$ove from the $an0in% s#stem),

to fi& separate su$;limits, !ithin the overall limits, specificall# for meetin% pa#ment o$li%ations in respect of purchases from MSEs either on cash $asis or on $ill $asis( /an0s !ere also advised to closel# monitor the operations in the su$;limits, particularl# !ith reference to their corporate $orro!ers1 dues to MSE units $# ascertainin% periodicall# from their corporate $orro!ers, the e&tent of their dues to MSE suppliers and ensurin% that the corporates pa# off such dues $efore the Gappointed da#1 9a%reed date $# usin% the $alance availa$le in the su$;limit so created( In this re%ard the relevant circular is circular IE3D9,90E(*2(0*92000;0* dated )cto$er * , 2000 (reiterated on Ma# :0, 200:, vide circular 'o( IE3D('o(2090E(*2(0*92002;0:) availa$le on our !e$site( Q.16. What is debt restructuring of advances? A.16. A via$le9potentiall# via$le unit ma# appl# for a de$t restructurin% if it sho!s earl# sta%e of stic0iness( In such cases the $an0s ma# consider to reschedule the de$t for repa#ment, consider additional funds etc( A de$t restructurin% mechanism for units in MSME sector has $een formulated and advised to all commercial $an0s (The detailed %uidelines have $een issued to ensure restructurin% of de$t of all eli%i$le small and medium enterprises( 5rudential %uidelines on restructurin% of advances have also $een issued !hich harmonises the prudential norms over all cate%ories of de$t restructurin% mechanisms (other than those restructured on account of natural calamities)( The relevant circulars in this re%ard are circularD/)D(/5(/3('o(:=92*(0=(*:29200,;0 dated Septem$er E, 200, and circular D/)D('o(/5(/3(:+92*(0=(*:29200E;08 dated Au%ust 2+, 200E !hich are availa$le on our !e$site !!!(r$i(or%(in( Q.18. >n restructuring of advances does the asset c assification b* the ban' change? A.18 The principles and prudential norms for asset classification on restructurin% of advances are prescri$ed in 5art / of the Master 3ircular D/)D('o(/5(/3(*292*(0=(0=E920**;*2 dated <ul# *, 20** on D5rudential 'orms on Income 4eco%nition, Asset 3lassification and 5rovisionin% pertainin% to AdvancesD( The special re%ulator# treatment for asset classification, under !hich the asset classification !ould not chan%e upon restructurin%, !ill $e availa$le to the $orro!ers en%a%ed in important $usiness activities, su$Aect to the compliance !ith certain conditions as specified in para *= of the a$ove circular( Q.%). What is the definition of a sic' unit? A.%). As per the e&tant %uidelines, a unit is considered as sic0 !hen an# of the $orro!al account of the unit remains su$standard for more than months or there is erosion in the net !orth due to accumulated cash losses to the e&tent of ,0C of its net !orth durin% the previous accountin% #ear and the unit has $een in commercial production for at least t!o #ears( The criteria !ill ena$le $an0s to detect sic0ness at an earl# sta%e and facilitate corrective action for revival of the unit(

Q.%1. 1s there a time frame !ithin !hich the ban's are re7uired to imp ement the rehabi itation pac'age? A.%1. ?ia$le9potentiall# via$le MSE units9enterprises, !hich turn sic0 in spite of de$t re; structurin% !ould need to $e reha$ilitated and put under nursin%( It !ill $e for the $an0s9financial institutions to decide !hether a sic0 SSI unit is potentiall# via$le or not( ?ia$ilit# of a unit identified as sic0, should $e decided -uic0l# and made 0no!n to the unit and others concerned at the earliest( The reha$ilitation pac0a%e should $e full# implemented !ithin si& months from the date the unit is declared as Dpotentiall# via$leD 9 Dvia$leD( The reha$ilitation pac0a%e should $e full# implemented $# $an0s !ithin si& months from the date the unit is declared as potentiall# via$le9via$le( Durin% this si& months period of identif#in% and implementin% reha$ilitation pac0a%e $an0s97Is are re-uired to do Hholdin% operationI !hich !ill allo! the sic0 unit to dra! funds from the cash credit account at least to the e&tent of deposit of sale proceeds( The relevant circular on reha$ilitation of sic0 units is 453D( ')( 52'7S(/3(,+90 (0=(0*9200*;2002 dated <anuar# * , 2002 availa$le on our !e$site( Q.%%. What are the $:1 guide ines on >ne =ime Sett ement scheme(>=S) for MSEs for sett ement of their ?,As? A.%%( Scheduled commercial $an0s have $een advised in terms of our circular 453D(SME6'7S( /3('o(*0290 (0=(0*9200E;08 dated Ma# =, 2008 to put in place a non ;discretionar# )ne time Settlement scheme dul# approved $# their /oards( The $an0s have also $een advised to %ive ade-uate pu$licit# to their )TS policies( (4efer circular 453D(SME6'7S( /3('o(*0290 (0=(0*9200E;08 dated Ma# =, 2008) Q.%+. What is the :an'ing 9odes and Standard :oard of 1ndia (:9S:1) and its ro e for MSEs? A.%+. The /an0in% 3odes and Standard /oard of India (/3S/I) constituted a Bor0in% Group comprisin% mem$ers from select $an0s, Indian /an0s Association, 4ural 5lannin% 6 3redit Department of 4eserve /an0 of India to formulate a /an0in% 3ode for SME 3ustomers( )n the $asis of discussions !ith Industr# Associations, $an0s, SID/I and Government a%encies, The /an0in% 3odes and Standard /oard of India (/3S/I) has formulated a 3ode of /an0Ds 3ommitment to Micro and Small Enterprises( This is a voluntar# 3ode, !hich sets minimum standards of $an0in% practices for $an0s to follo! !hen the# are dealin% !ith Micro and Small Enterprises (MSEs) as defined in the Micro Small and Medium Enterprises Development (MSMED) Act, 200 ( The 3ode ma# $e accessed on the !e$site of /3S/I !!!( $cs$i(or%(in