Proprietorship / Partnership firms, Limited Companies falling within the new definition of SME, engaged in the business for the past 3 years with audited financial statement of accounts



  • The borrower should have known source of funds to pay for the margin and initial recurring expenses.
  • Should be profit making for the last 2 years
  • Entry level credit rating SBS 5. No deviation to be permitted.



General purpose term loan for SME constituents Viz., for R & D activity, marketing and advertisement expenses Purchase of machineries / equipments, Preliminary expenses etc.


Nature of facility


Term Loan.

The safety of this advance will substantially depend on cash flow arising out of activity being financed. It should be ensured that the profits generated / anticipated to be generated turns into liquid cash to service the loan.




To be repaid in 84 installments within a period of 7 years inclusive of moratorium period of up to 12 months. Interest to be serviced as and when debited.


Appraisal of loan


50% of unencumbered value of the property under offer or 75% of actual requirement for the stated purpose which ever is less

Minimum : Rs.10 lacs

Maximum : Rs.500 lacs

Note : Extant guidelines with regard to valuation of property, title clearance and inspection by two different officials etc., must be strictly adhered to.


Rate of interest


As per prevailing rate of interest structure in terms of HOBC: 113/167 dtd. 13-12-2019.


Processing Fee, Documentation charges etc

As per extent guidelines of the Bank



i.) Primary: Hypothecation of assets or mortgage of land , if loan is considered for that purpose. If no assets are created then it should be treated as clean

ii) Collateral: EQM or Registered Mortgage of Residential / commercial property (1st charge) either of borrower or of guarantor. However following conditions with regard to property under offer should be fulfilled ;


1. It should not be an agricultural property

2. It should not be a vacant land



Assets charged to the Bank to be comprehensively insured covering various risks including civil commotions and riots. The policies should be renewed from time to time and copy retained on branch record. Bank’s interest to be got noted in the insurance policy. Separate insurance policy to be obtained for the mortgaged property