The branches would give acknowledgement (with date of receipt and running serial number) on the duplicate of the application received.
All loan applications for Micro and Small Enterprise up to a credit limit of Rs. 25,000 would be disposed of within 2 weeks and those up to Rs. 5 lacs within 4 weeks provided the loan applications are complete in all respects and accompanied by a 'check list'. These time limits of 2 weeks /4 weeks are outer limits only and we would endeavor to dispose of loan applications at the earliest.
While no collateral will be required for limit upto Rs. 5 lacs in the case of Micro and Small Enterprise units, collateral for limits above Rs 5 lacs and upto Rs 25 lacs would be called for, if considered necessary.
The Bank has already registered as Member Lending Institution with Credit Guarantee Fund Trust Scheme for Small Industries (CGTSI) launched by SIDBI, which provides guarantee cover of 75 % of the amount of default, in respect of facilities upto Rs 25 lacs, without collateral security and/or third party guarantee. A schematic product Zero Collateral Loans to SSI is available.
A composite loan limit of Rs 1 crore may be sanctioned to enable the Micro and Small Enterprise entrepreneurs to avail of their working capital and term loan requirement through Single Window.
A unit is considered as sick when any of the borrowal accounts of the unit remains substandard for more than 6 months or there is erosion in the net worth due to accumulated cash losses to the extent of 50% of its net worth during the previous accounting year and the unit has been in commercial production for at least two years. The rehabilitation package should be fully implemented within six months from the date the unit is declared as potentially viable/viable. During this six months period of identifying and implementing rehabilitation package we may do "holding operation" which will allow the sick unit to draw funds from the cash credit account at least to the extent of deposit of sale proceeds. Following are broad parameters for grant of relief and concessions for revival of potentially viable sick Micro and Small Enterprise units:
Interest on Working Capital
Interest 1.5% below the prevailing fixed / prime lending rate, wherever applicable
Funded Interest Term Loan
Interest Free
Working Capital Term Loan
Interest to be charged 1.5% below the prevailing fixed / prime lending rate, wherever applicable
Term Loan
Concessions in the interest to be given not more than 2 % (not more than 3 % in the case of tiny / decentralized sector units) below the document rate.
Contingency Loan Assistance
The concessional rate allowed for Working Capital Assistance
We also provide loans under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industrial units in Micro and Small Enterprise sector and to 21 Specified Industries in Micro and Small Enterprise sector for technology upgradation under Credit Linked Subsidy Scheme (CLCSS).
Repayment programme would be fixed taking into account the sustenance requirements, surplus generating capacity, the break-even point, the life of the asset, etc., and not in an "ad hoc" manner. In respect of composite loan up to Rs. 50,000 to artisans, village and cottage industries, repayment schedule may be fixed for term loan component only, subject to SIDBI's requirements being fulfilled. In the case of other borrowers affected by natural calamities, we may convert drawings in excess of the value of security into a term loan repayable over a reasonable period of time and provide further working capital and extend/re-phase the installments due under term loans.
The rates of interests charged to Micro and Small Enterprise units will be linked to their ratings (internal) and subject to the Bank's guidelines/Corporate Credit Policy. The interest rates on loans upto Rs 2 lacs will not exceed BPLR. While no penal interest will be charged for loans under priority sector upto Rs. 25,000 charging of penal interest in other cases will be as per the Bank/s guidelines.
While there will be no service charges/inspection charges on priority sector loans upto Rs. 25,000, levy of such charges in other cases will be as per the Bank's guidelines. We may waive insurance of assets in the following cases:
We may waive insurance of assets in the following cases:
No.
Category
Type of Risk
Type of Assets
(a)
All categories of priority sector advances upto and inclusive of Rs. 10,000
Fire & other risks
Equipment and current assets
(b)
Advances to SSI sector upto and inclusive of Rs. 25,000 by way of -
Composite loans to artisans, village and cottage industries
Fire
Equipment and current assets
All term loans
Fire
Equipment
Working capital where these are against non-hazardous goods
Fire
Current Assets
For any clarification/more information contact the nearest Advances Cell.
For any clarification/more information contact the nearest Advances Cell.
