ABhivrudhi – Scheme Guidelines:

Parameter Guideline
1 Name of the ABhivrudhi
scheme
2 Objective To finance working capital and TL requirements of MSE
borrowers (including Traders) against property
3 Eligibility All MSE (Micro & Small) units (both existing and new units
including Retail/Wholesale Traders) subject to investment in
Plant & Machinery/Equipment as per MSMED Act 2006.

 The applicant should have minimum of 2 years standing

and profit making for the past 2 years.
 New entrants (only for limits upto Rs 1.00 Cr) can also
be considered provided the estimates/projections are
reasonable.
4 Banking Sole Banking. Multiple/Consortium banking arrangements are
Arrangement not be entertained in this scheme.
5 Nature of Facility Fund Based [SOD or TL] and Non Fund Based [BG/LC]
6 Limit/Quantum of Minimum: Above Rs 10 lakh
the loan Maximum: Rs 6.00 Crs
7 Tenor For TL: Repayable in maximum 7 years including holiday
period.
For WC limits: 2 years
Note: Irrespective of the tenor, the limits are to be reviewed
once in a year and processing charges shall be collected on
annual basis for WC limits.

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8 Method of Working Capital:
assessment Not more than 25% of the assessed turnover
(estimated/projected turnover subject to not more than 30%
of the last two years’ average turnover) shall be fixed as the
WC limit.

Existing turnover shall be ascertained based on the

documents as detailed below based on the limit
applied/actual turnover:

Parameter Requirement
Limit applied Actual
Turnover
Above Rs 10 Upto Rs 1.00 Statutory returns
lakh & upto Rs Crore like GST returns
25 lakh and other tax
returns along
with declaration
from the
borrower.
Rs 25 lakh & Above Rs 1.00 Audited Balance
above Crore Sheet
No CMA data to be insisted upon. Financial ratios need not be
looked into, other than repayment capacity i.e., profit after
tax, cash profit etc., Exposure norm compliance is to be
ensured as per the respective delegated powers.

Sanctioning Authority shall ensure that the

Estimated/Projected turnover is inline with the earlier
performance of the unit and is reasonable/realistic.

Term loan:
The limit shall be arrived as the cost of assets to be
created/procured less minimum margin of 25% on the cost of
the asset.

DSCR shall be arrived based on the PAT, depreciation and

proposed TL interest and installments over the entire period
of repayment. Average DSCR shall not be less than 1.50.
9 Security Primary for TL: All the assets created out of the TL

Primary for BG/LC: Cash margin of minimum 15%, counter

guarantee of the applicant and extension of charge on entire
current assets of the unit

Security for SOD/Collateral for TL, BG and LC:

Security coverage for SOD/Collateral coverage TL/Collateral
coverage for clean portion of BG/LC shall be

A. Minimum of 125% (i.e., margin of 20%) by way of Semi

Urban/Urban/Metro immovable property or
B. Minimum of 111.11% (i.e., margin of 10%) by way of
Liquid securities viz., term deposits of our bank/NSCs/life
insurance policies(surrender value is to be considered)
Note:
a) Third party securities shall not be accepted. Properties
should be in the name of the borrower

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 (Proprietor/Partner/Director) or close relatives such as
spouse, parents, children, brother and daughter-in-law.
The properties should be in the name of the borrower or
close relative for a minimum period of 1 year.
b) Land should be non-agricultural and building age should
not exceed 30 years.
c) Rural properties (Non-agricultural & enforceable under
SARFAESI) can be accepted with a margin of 50% (i.e.,
with security coverage of 200%) for limits upto Rs 1.00
Cr.
d) In case of vacant land/plot, prior permission from
ZLCC(A) shall be obtained duly ensuring that the vacant
site is having an approved layout plan with clear
demarcated boundaries with proper right of way and is
not a land locked property.
e) Extension of available residual value of security offered by
the borrower for the HL availed can be considered subject
to fulfilling the LTV prescribed in the sanction of HL and
satisfactory servicing of HL instalments for a period of 12
months continuously.
f) Hypothecation of stocks & receivables and charge on
entire Current Assets (present & future) of the unit is to
be obtained in case of WC limits.
g) Extant loan policy guidelines with regard to valuation of
properties, creation of mortgage, registration with SRO &
CERSAI, Registration of charges with ROC (in case of
companies), verification of title deeds, search report, visit
of the properties, re-verification of title deeds etc., are to
be followed scrupulously.
10 Minimum Margins  15% cash margin for BG/LC
 10% on liquid securities like term deposits of our
bank/NSCs/life insurance policies
 20% on Semi-urban/urban/metro immovable properties
 50% on rural properties (only for limits upto Rs 1.00 Cr)
11 Co-Obligation  Owner of the property offered as security should be co-
obligant to the loan
 Suitable Co-obligation should be obtained in case of
individual/proprietary concerns, if the security offered is
in the name of borrower constituent himself.
 Joint & several liability of all the partners of the
partnership firm is to be obtained.
 Personal guarantee of all the promoter directors is to be
obtained in case of a company.
12 Credit rating Internal and External Credit rating is to be obtained as per
the existing loan policy guidelines of the bank.

Minimum acceptable credit rating (Hurdle rating) is as below:

*Internal: ‘B & above’.
*External: ‘BB(+ or -) & above’ [long term]
‘A4 (+ or -) & above’ [Short term]
*subject to changes in loan policy guidelines from time to time
13 Rate of Interest SOD: 1 year MCLR+2.35% p.a

TL: 1 year MCLR+1.90% p.a

Note:
 Term Premium of 0.25% (for TLs with repayment period
of above 3 years & upto 5 years including gestation) and

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 0.50% (for TLs with repayment period of above 5 years
including gestation) is to be added.
 Risk Premium of 0.25% is to be added in case of
accounts with internal rating of ‘B & below’ and/or
external rating of ‘BB & below’.
 A concession of 0.50% in the applicable spread (other
than Risk Premium) may be extended to Women
Entrepreneurs
 When both internal and external ratings are available,
external rating is to be considered for deciding the
eligibility and the applicable Risk Premium.
14 Processing As per extant loan policy guidelines of the bank.
Charges/Upfront fee However, a concession of 25% in the applicable processing
charges/upfront fee may be permitted by the respective
sanctioning authority.
15 Other concessions  100% concession in Unit inspection charges
 50% concession in the TL annual review charges
applicable to MSME units.
 No pre-payment charges for full or part pre-payment
provided the pre-payment is from the unit’s own sources.
 Conduct of Stock & Receivables Audit may be waived for
the accounts upto Rs 3.00 Crs sanctioned under the
subject scheme. However, sanctioning authorities shall
ensure end use of funds and satisfactory performance of
the units by conducting periodical unit inspections.
 If the limit sanctioned is higher than the S&R value, then
further disbursement should be made only for acquiring
stock. MSOD/QIS need not be insisted upon.
16 Other Conditions  No Adhoc/Excess drawls are to be permitted
 Cash drawls shall not be more than 10% of the limit.
 End use of funds is to be ensured by the sanctioning
authority/Branch Manager.
 Assessment of repayment capacity is to be elaborated in
the process note.
 Turnover in the account is to be monitored on timely
basis and ensure that the estimated/projected turnover
is achieved.
 Sanctioning authority/Branch Manager to ensure that
the borrower routes entire turnover through our SOD
account.
 Overall exposure (both FB & NFB) of the borrower under
the scheme shall not exceed Rs 6.00 Crs.
 Sanctioning authority/Branch Manager to ensure that all
the securities are insured for full value against all types
of risks with bank clause as per loan policy guidelines of
our bank.
 Though DP is not arrived on the value of stocks, detailed
Stock Statements are to be obtained once in a year and
performance of the unit is to be reviewed by the
sanctioning authority based on the same.
 Compliance to all the loan policy guidelines of our bank
(other than mentioned above) is to be ensured as
applicable.
 All the applicable processing charges and other service
charges (subject to the concessions as mentioned
above) are to be collected as per the guidelines in force.