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 SME POLICY
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However, the issue of collateral security would be addressed on a case-specific basis.
Currently, credit limits upto Rs.100 lakh per borrower in the Micro & Small Enterprises sector get covered under Credit Guarantee Scheme of CGTMSE. The present position of one-time Guarantee (Joining) fee and Annual Service fee is as under
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Limit
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One time Guarantee Fee (GF)
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Annual Service Fee (ASF)
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To be borne by
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Upto Rs.5 lacs
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1.00%
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0.50%
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50% of GF will be borne by Bank. However, in the case of PMEGP borrowers with limits upto Rs.5 lacs, entire GF and ASF will be borne by the Bank.
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Above Rs.5 lacs upto Rs.50 lacs
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1.50%
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0.75%
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50% of GF will be borne by Bank.
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For borrowers of North eastern region including Sikkim, for limits upto Rs.50 lacs
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0.75%
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0.75%
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50% of GF will be borne by Bank.
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Above Rs.50 lacs to Rs.100 lacs for all borrowers
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1.50%
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0.75%
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Both GF and ASF to be fully borne by the borrower.
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Margin requirements, which normally are 25%, would vary depending on the nature of the special Schemes.
16. Time Norms for Disposal of Applications:
With the switchover to the simple Turnover Method for all advances in the SME segment up to Rs.5 Crores, the time for processing of the applications and sanction has to be curtailed as under (from the date of submission of complete papers by the borrower):
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Limits
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Time Limit Not Exceeding
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Up to and including Rs.25,000/=
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4 Business Days.
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Over Rs.25,000/= and up to Rs.10 Lakhs
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8 Business Days.
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Over Rs.10 Lakhs up to Rs.5 Crores
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12 Business Days.
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Over Rs.5 Crores
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20 Business Days.
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In case of rejections, approval shall have to be obtained from the next higher authority, not below the level of Zonal Manager
A register should be maintained at the branches to record the dates of receipt of applications/ sanction/ disbursements/ rejections with reasons therefore
17. External Credit Rating
To Encourage Small & Medium Enterprises to avail the service of external rating Agencies to the units obtaining credit rating from agencies empanelled by the National Small Industries Corporation (NSIC) viz, Dun & Bradstreet, ONICRA, ICRA, CARE, FITCH,CRISIL and SMERA concessions in the applicable rate of interest to the extent of 0.50% in respect of units obtaining the Highest & 2nd Highest ratings and to the extent of 0.25% in respect of units showing the 3rd Highest rating is given.
18. Delegation:
This will be as per the bank’s scheme of delegation circulated by the Risk Management Department of the Bank. The present scheme of delegation is adequate to take care of the needs of MSME borrowers at various levels.
19. Marketing:
A dedicated Sales Force Team is already in place in all potential centres to market MSME Credit. Relationship Managers at the Branches would take care of the clientele requirements and do up-sell/cross-sell at the identified Branches.
20. Training:
Credit officials at the various levels have been trained adequately, with a view to up date themselves and also give renewed thrust to the SME lending. Training programmes on an on-going basis is proposed at MDI,CBD Belapur and other STCs, for all the Managers and Senior credit officials at all branches handling MSME credit so that the bank staff would be equipped with the necessary skill/expertise to achieve the required MSME business growth.
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21. Tie-Up For SME Financing
MOU for a strategic alliance with various Original Equipment Manufactures (OEMs) such as Tata Motors Ltd., Piaggio Vehicles Private Ltd , JCB India Ltd, Mahindra Navistar Automotive Ltd., Ashok Lyland Ltd. etc has been entered into for giving boost to financing in MSME sector more particularly to SRTOs. In order to make the tie ups more effective, moves are afoot to map the regional sales heads of the OEMs with Nodal Officers for MSMEs in different Zones through National Banking Group Centers. We have also tied up with Dun & Bradstreet for carrying out due diligence exercise for prospective client as well for existing borrowers with limit of Rs.1 Crore and above in select 10 centres to provide additional comfort to the branches in decision making, on pilot basis. The same will be rolled out to pan India upon receiving the feedbacks from the selected centers. Such strategic tie ups will continue to be our thrust area in order to maintain our pace in MSME financing.
22. Bank’s MSME Schemes/Products.
To assist and promote the growth of the SME sector, Bank has recently revamped the existing Star Laghu Udyami Samekit Loan (a composite loan product) extending the coverage pan India and increasing the quantum of Loan to Rs.100 lacs and also launched a new scheme on the eve of 105th centenary celebration of bank’s foundation day with attractive and simplified features. The nomenclature assigned to the new scheme is “Star MSE Demand / Term Loan”. There will be continuous review of schemes, products, and procedures for improvement and for matching market expectations.
23. Rehabilitation of Sick units & Debt Restructuring
Rehabilitation involves pre-emptive identification of causes of sickness, assessment of the sick unit’s viability, and nursing viable sick unit back to health to ensure that the unit generates adequate surplus to service the debt including interest burden and also to wipe off the past losses. The Bank’s extant instructions and RBI guidelines on the Rehabilitation of Sick Units would be applicable mutatis mutandis.
Bank’s Policy document on Debt Restructuring and Rehabilitation for SMEs was adopted by the Board on 16-05-2008. We may continue the same policy without any change, as the existing one is on the lines suggested by Reserve Bank of India in their latest Master Circular.
24. Monitoring & Reporting to Top Management
The progress of the MSME Branches and the MSME Credit expansion as also the units under nursing would continue to be submitted to the Board on a quarterly basis to ensure that the required emphasis at the highest forum of the bank is given to the MSME sector.
25. Display of MSME Policy
For wider dissemination and easy accessibility, the reviewed MSME policy guidelines would be displayed on the Bank’s website. The various schemes are already on display at all the identified MSME branches and in the Bank’s website.
26. Bank’s Commitment
The Bank is committed to the following:
- To provide checklists along with applications to? SME Proponents.
- To issue acknowledgements upon proponent’s submission of application forms.
- To comply with the stipulated time norms for disposal of applications.
- To consider composite loans up to Rs.1 Crore.?
- To cover all eligible MSE advances up to Rs.25 Lakhs without any collaterals or third party guarantee under Credit Guarantee Fund Trust for Micro & Small Enterprises
- No collateral Security for loans to Mircro? & Small Enterprises up to Rs.10 Lakhs.
- The issue of collateral security would be dealt? with on account-specific basis.
- To adopt Turnover Method prescribed by Nayak? Committee for all Working Capital advances up to Rs.5 Crores or MPBF method for specific cases with operating cycles longer than 3 months.
- To offer interest concession up to 1% to Women? Entrepreneurs under Priyadarshini Scheme
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Annexure III
List of Industry-Related Service Activities
- Advertising Agencies.
- Marketing Consultancy.
- Industrial Consultancy.
- Equipment Rental & Leasing.
- Typing Centers.
- Xeroxing.
- Industrial Photography.
- Industrial R & D Labs.
- Industrial Testing Labs.
- 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 and Finished Goods.
- “Servicing Industry” Undertakings engaged in maintenance, repair, testing or servicing of all types of vehicles and machinery of any description including Electronic/Electrical Equipments/Instruments i.e. measuring/control instruments, televisions, tape recorders, VCRs, Radios, Transformers, Motors, Watches, etc Press
- Laundry & Dry Cleaning.
- X-Ray Clinic.
- Tailoring.
- Servicing of Agriculture Farm Equipment e.g.. Tractor Pump Rig Boring Machines etc.
- Weigh Bridge.
- Photographic Labs.
- Blue Printing and Enlargement of Drawing/Designs, Facilities.
- ISD/STD Booths.
- Teleprinter/Fax Services.
- Creation of Data Bases suitable for Foreign/Indian Markets. Software Development.
- Data Conversion, Data Mining, Digitization, Data Entry, Data Processing, Data Warehousing.
- Digitisation of spoken material (e.g. legal and medical transcription)
- Computerised Call Centers.
- Geographic Information Systems Mapping/services.
- Web-Designing/Web Content Development Services.
- Computer Aided Design/CAD/CAM Services. 0.E-Mail, Data, Internet, Fax Service Provider.
- ISP Services(Communication channels like V-Sat, Optical Fiber NOT included ).
- Computerised Desk Top Publishing.
- Web Service Providers, including web hosting and website management.
- USDN Service Providers.
- Computer Systems AMC Service Providers.
- Multi Media Development Units (including e.g. animation and special effects, video and photo digitization)
- IT Solution Providers/Implementers (such as and including server/data banks, Application Service Providers, Internet/Web-based e-Commerce service providers, Smart Card customization service provider, systems integration service providers).
- Cyber Café/Cyber Kiosks/Cyber Parlors and Video Conferencing Centres/Parlours.
- Back Office Operations relating to Computerised Data.
- Other Services provided with the intensive use of computers (such as and including telemedicine services, remote access cyber services, remote diagnostic and repair services)
- Multi Channel Dish Cable TV with Dish Antenna.
- Video Shooting.
- Hot Mix Plant (irrespective of mobile or immovable).
- Research and Development.
The list is illustrative only and not exhaustive
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