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Presentation

On

Micro, Small & Medium

Enterprises
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The Small & Medium Enterprises are critical to the nations economy they contribute approximately 40% of Indias 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. 2

SME SECTOR SIGNIFICANCE IN INDIAN CONTEXT


SMEs are generally less capital-intensive and more labour-intensive. Are best suited for countries like India and most of the developing world having abundant supply of low-cost manpower and bountiful natural resources. Have provided seed bed for Enterprise Development in the country Provide large scale employment, ensure equitable distribution of income and facilitate effective mobilization of resources of capital and skills, which would otherwise remain unutilized, particularly in rural and backward areas. India has already established a niche in SME Development Strategy and providing excellent support in product development, R&D, financial instruments, Infra-structure, marketing and export development Consequently, India is fast emerging as a global hub for labour-intensive manufacturing and knowledge3 oriented businesses.

Back Drop
Highlights 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.

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.

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


(Rs. In crore) S.N o a) b) c) Sectors 2005-06 2006-07 2007-08 200809 154703 29.45 50793 17.00 23700 30.23 15.31 18035 16083 31.09 2009-10 (June, 09) 157979 38.06 51333 24.62 24841 46.20 15.72 18598 16611 32.35 50726 30.02 24936 49.47 16.78 18763* 16598 32.72 2009-10 (Aug., 09) 149296

Gross Credit %age growth PS Credit %age growth SME Credit %age growth Share of SME out of gross credit-%age

74627 23.5 33409 26.22 11689 28.77 15.66 8612 8612 25.78

96597 29.4 40197 20.32 14511 24.14 15.02 11028 11028 27.43

119508 23.7 43412 8.00 18199 25.41 15.22 13819 12294 28.31

d) e) f)

Share of MSE out of above (c) Micro & Small Enterprises PS Share of SE out of PS credit-%age

*The SOI of MSE advances of the Bank is Rs. 22543 crore.

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 & Jute sector (TUFS), Small Enterprises Sector in select products/by products (CLCSS) and Food & agro Processing sector extended to these sectors through Banks. 8

Cont.
5. Branches not offering focused approach towards financing of Service Sector activities, as this sector offers comparatively large scope of financing comparatively to Manufacturing Sector. 6. Despite simplification of appraisal system, dependence on services of Technical Officers for project appraisal even though in small cases.

Over view on SME

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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

Enterprises

Enterprises engaged in Manufacturing / production/processing (Investment in Plant & Machinery) Services (Investment in Equipments)
Upto Rs 10 lakh

Micro

Upto Rs 25 lakh

Small
Medium

Above Rs 25 lakh & upto Rs 5 crore


Above Rs 5 crore & upto Rs 10 crore

Above Rs 10 lakh & upto Rs 2 crore


Above Rs 2 crore & upto Rs 5 crore 11

The Scope of the MSMED Act, 2006 has been enlarged by incorporating advances to all business & Service activities under the ambit 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. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29.

Advertising agency Advances to Transport Sector Advances to Small & Large Business activities Advances to Professionals & Self Employed Nursing homes/clinics Courier Services Architecture Designers Events Management Catering Gems & Jewellery designing Equipment Rental & Leasing Typing Centres Xeroxing Industrial Photography Industrial R & D Labs. Industrial Testing Labs Desk Top publishing

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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 advertising 33. 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

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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 laboratory 46. 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 Crches

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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. a. b. c. d. Sector Specific Schemes; Advances to Micro Enterprises. Scheme for acquisition of ISO-9000 certification Scheme for financing artisans, village and cottage industries. 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 SME projects. Requirements of services of Technical Officers for appraisal of every projects even 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 for Micro 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 20 complete this exercise latest by December, 2009)

INITIATIVES TAKEN BY BANK TO BOOST SME ADVANCES

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1. MSME SPL. BRANCHES : The Bank has operationalised 510 Specialised MSME branches/ focus branches to provide hassle free 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 rerolling 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 SME finance 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 Circle Offices 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 made under the Code, Micro and Small Enterprises customers shall be provided easy access to our services. We shall also maintain desired standards of service and ensure transparency in our dealings.
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6.

Micro Enterprises

For 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, BMs have been vested with special higher loaning 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 loaning powers.

Focused attention for extending Collateral free loans up to Rs. 100 lakh and Next Higher authority can permit acceptance of guarantee/ 27 Collaterals.

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). 5. Against existing unencumbered machinery : 25%
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:25%*

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8. Assessment of Working Capital Working capital to SME borrowers is assessed as per simplified turn over method (Nayak Committee ) 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 waived having 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 for contingencies like additional purchase of raw materials including packing materials/handling charges for the execution of bulk orders, taking part in national/international trade exhibitions for creating market base, payment of consultancy charges, repairs to machinery, labour payments, etc. In order to meet payment of statutory dues exclusively 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% Green Cash Credit facility maximum upto Rs.2.00 lakh of the fund based sanction limit/assessed permissible bank finance, over & above regular adhoc facility or Credit Facility availed by SSI units under SME 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 General Manager(HO) relax up to 3.00:1 and ED/CMD shall relax up to 4.00:1.

Processes for speedy disposal of SME projects


11. 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.

District-wise Project Reports

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 initially for projects up to Rs. 1 crore to be extended subsequently up to Rs. 2 crore. These project 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-economic viability study for proposals under these activities where the standard project reports have been prepared. 33

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 for growth 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 Banks 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).

CGTMSE
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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 on hire, 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. 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. INTEREST : As per banks 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. 37

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 case may be.
MARGIN For new Vehicle: For Old Vehicle: 10% 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. 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. INTEREST : As per banks 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. 39

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 the purpose 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 40

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 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.
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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 disabled persons, 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

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 the venture 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 drawing pension/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 educational institutions, 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 drawing pension / 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 acceptable to 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.
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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 war widows if found technically feasible and economically viable by the sanctioning authority.
EXTENT OF LOAN: Maximum Rs.2.00 lakh (In Rural Areas) Rs. 5.00 lakh (In Semi Urban, Urban & Metros) 17 April 2012

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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 Service/Business Enterprises. ELIGIBILITY: Small units having investment upto Rs
10.00 lakh in fixed assets, excluding land & building engaged 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 the requirement 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 LOANS & ADVANCES CIRCULAR NO.20/2005 and 93/2008

PURPOSE To finance fixed assets required for setting up the business 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 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 premises financed 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


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 Software services/ 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

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 older than four months) and other assets to be used in the trade. EXTENT OF LOAN Working Capital/Term Loan (fund based & nonfund based) - Need Based

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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 third party 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
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.
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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.
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Scheme for acquisition of ISO 9000 certification OBJECTIVE: To promote quality management system in SSI units with a view to strengthening their marketing and export capabilities. 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.

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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 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 Artisans, Village & Cottage Industries ELIGIBILITY: The Artisans/village and cottage industries requiring assistance must have a fixed place of work. The entrepreneurs 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 17 April 2012 63 for productive purposes.

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 view maximum 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 to be obtained

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Scheme for financing Craftsman & Qualified Technician Entrepreneurs


OBJECTIVE To assist technician entrepreneurs proposing to set up small scale 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 in case of partnership or private limited units (constituted by two or more technician entrepreneurs) it will be upto Rs 5 lakh.
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ELGIBILITY: Technically qualified entrepreneurs and/or 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 directors of 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 Circular No. 16/2009 dated 31st January, 2009 COLLATERAL SECURITY: No collateral security required.
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Scheme for financing Handloom Weavers & Artisans engaged in Handicrafts. ELIGIBILITY: The artisans should have a fixed place of
business, should be qualified/ experienced in the operation of 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 the purchase 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.
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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.

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Scheme for financing Housewives & other women 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 to undertake. 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)
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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.

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Scheme for financing Small Enterprise


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. 16/2009 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, it is mandatory that no collateral security iis to be obtained for loans upto Rs 5 lakh (new units of MSEs) 71 both Manufacturing and Service Sector.

CREDIT REQUIREMENTS 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 the existing factory with a view to improving the quality or reducing production cost, creating additional infrastructure facilities, like setting up of Research & Development Centres / Testing Laboratories and purchase of vehicle (other than the vehicles meant for personal use) which are required exclusively to meet production 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 postshipment requirements).
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PNB ARTISANS CREDIT CARD SCHEME


To provide hassle free financial support to Artisans and to make credit delivery simple and easy ELIGIBILITY: All artisans involved in production/ manufacturing process (and otherwise 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/reimburse one time Guarantee money and Annual service fee to bank for obtention of guarantee cover under credit guarantee scheme of CGTSI to facilitate flow of credit to the Handicraft Artisans.
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PNB LAGHU UDYAMI CREDIT CARD SCHEME


To provide hassle free financial support to Small business units, Retail Traders, Artisans, Village Industries, Small Scale Industrial Units, Small Scale Services & Business Enterprises (SSSBEs) and Tiny Units, Professionals and Self Employed Persons, etc. ELIGIBILITY: Borrowers belonging to aforesaid categories enjoying Cash Credit limits upto Rs 10 lakh and whose dealings with 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 annual turnover, (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 the assessment norms in vogue as per the Nayak Committee recommendations.

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PNB SME Sahayog Scheme: is a new product , designed to meet the unforeseen expenditure of the small-enterprises with excellent track record. 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 a special 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 75 lakh.

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 in national/international trade exhibitions for creating market base, payment of consultancy charges, repairs to machinery, labour payments, etc. RATE OF INTEREST: As per Loans & Advances Circular 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.

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PNB Green Scheme : CREDIT FACILITY TO SSI UNITS - Five per cent Green Credit Facility for clearance of statutory dues. ELIGIBILITY: All Micro & Small Enterprises units PURPOSE: In order to meet payment of statutory dues exclusively 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% Green Cash 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 77

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 financing of 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 equity type support to entrepreneurs for setting up new projects in tiny/small scale sector, for undertaking expansion, modernisation, technology upgradation and diversification 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 existing Manufacturing & service enterprises excluding SRTO. Assistance to Service Enterprises liked with acquisition for fixed assets only. AMOUNT OF ASSISTANCE: Amount as may be required to meet 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 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 and service enterprises, the total outlay, including the proposed outlay on expansion/ modernisation/technology upgradation/ diversification of rehabilitation should not exceed Rs.50 lakh. PROMOTERS CONTRIBUTION : Minimum 10% of the project cost. DEBT EQUITY RATIO: 65:35 or 1.857:1 (excluding State Investment Subsidy). However, a flexible approach may be followed in the case of rehabilitation proposals. 80

Mahila Udyam Nidhi Yojana


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 assistance under 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 those which have availed of MUN assistance earlier], undertaking expansion, modernisation, technology upgradation and diversification.

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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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CREDIT GUARANTEE FUND TRUST SCHEME


FOR

MICRO & SMALL


ENTERPRISES
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SALIENT FEATURES - CGTMSE


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 & Educational Institutions) 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 Guarantee Scheme. The decision to release the collateral security and / or third party guarantee in respect of the existing credit facilities extended to the eligible SSI units have been left to the discretion of the respective bank / lending institution (MLI).
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Mandatory Coverage under CGTMSE


Bank 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 third party guarantee/ Collaterals in exceptional circumstances.
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EXTENT OF GUARANTEE COVER


The Trust shall provide guarantee as under; w.e.f. 8th December, 2008
Category Maximum extent of guarantee where credit facility is Upto Rs 5 lakh Micro enterprises 85% Rs 4 .25 lakh Above Rs 5 lakh upto Rs 50 lakh 75% Rs 37.50 lakh Above Rs 50 lakh upto Rs 100 lakh Rs 37.50 lakh plus 50% of amount in default above Rs 50 lakh subject to overall ceiling of Rs 62.50 lakh R 40 lakh plus 50% of amount in default above Rs 50 lakh subject to overall ceiling of Rs 65 lakh.

Women entrepreneurs / Units located in North East Region (incl. Sikkim) All other category of borrowers
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80% of the amount in default subject to maximum of Rs 40 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.87

Tenure of Guarantee
The guarantee cover shall run through the tenure of the term credit / composite credit Where working capital alone is financed 5 years; to be renewed thereafter. The guarantee cover will commence from the date of payment of guarantee fee.

Guarantee fee & Annual Service Charges


One time Guarantee Fee For loans up to Rs. 5 lakh Loans above Rs. 5 lakh Loans up to Rs. 100 lakh sanctioned to units in North Eastern states 17 April 2012 1.00% 1.50% 0.75% Annual Service Fee 0.50% 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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TECHNOLOGY UPGRADATION SCHEME FOR SMALL ENTERPRISES SECTOR

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CREDIT LINKED CAPITAL SUBSIDY SCHEME FOR TECHNOLOGY UPGRADATION OF THE SMALL MANUFACTURING ENTERPRISES (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 institutional finance 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 Technologies under the CLCSS)
i) Bio-tech Industry ii) Common Effluent Treatment Plant iii) Corrugated Boxes iv) 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 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) Locks xxix) 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 Graphite and Phosphate xxxx) Khadi and Village Industries xxxxi) Coir and Coir Products xxxxii) Steel Re-rolling and /or Pencil Ingot making Industries xxxxiii) Zinc Sulphate xxxxiv) Welding Electrodes xxxxv) Sewing Machine Industry

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TECHNOLOGY UPGRADATION FUND SCHEME (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
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CAPITAL SUBSIDY SCHEME (CLCSS-TUFS) FOR SSI 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.15 Lakh (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 on margin 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 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 nonperforming 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 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 receiving timely & 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 Drawee Bill discounting facility Or Overdraft facility.
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L&A Circular No.. 64/2008

PNB SSI URJA SCHEME SCHEME FOR FINANCING - PURCHASE OF NEW/OLD DIESEL GENERATING SETS WITH OR WITHOUT ACOUSTIC ENCLOSURES :To provide adequate & timely financial support from the banking system to the above categories 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 Diesel Generating 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 Related Service/Business enterprises) SSI To encourage existing Small industry related service/business enterprises/units having investment in fixed assets upto Rs 10.00 lakh, to modernise their services facilities and adopt improved and updated technology 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/metropolitan areas/ village/town irrespective of its population) having investment in fixed assets upto Rs 10.00 lakh would be eligible 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 the prescribed ceiling) & working Capital will be need based.
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