MSE POLICY

The Bank has adopted a policy for lending to SME sector, in tune with the
Government of India guidelines as per MSMED Act 2006, which is being modified
suitably to incorporate guidelines issued by RBI from time to time. Restructuring
/Rehabilitation policy for revival of potentially viable sick units/ enterprises and Non-
discretionary one time Settlement scheme for recovery of non-performing loans are
also part of the MSE policy adopted by the Bank.

The salient features of the policy are:

SME segment comprises of Micro, Small and Medium Enterprises under both
manufacturing and trade & service sectors.

Definition:

Category Manufacturing Trade & Services

Investment in Plant & Machinery Investment in equipment
Original cost) excluding land & (original
Building Cost) excluding land &
building
Micro Upto Rs.25 lakh Upto Rs.10 lakh
Enterprises
Small Above Rs.25 lakh & upto Rs.500 Above Rs.10 lakh & upto
Enterprises lakh Rs.200 lakh

Medium Above Rs.500 lakh upto Rs.1000 Above Rs.200 lakh upto
Enterprises lakh Rs.500 lakh

@ Medium Enterprises will not form part of Priority Sector Lending.

Charter for Micro and Small Enterprises:

 MSE entrepreneurs have right to seek credit assistance from Bank
branches convenient to them.
 Bank considers loan/credit assistance to MSE units for acquisition of
fixed assets and working capital requirements.
 Acknowledgement for receipt of loan applications by branch by affixing
date stamp.
 Simplified loan applications cum interview cum appraisal forms are
available with the branches.
*Time norms for disposal of loan application: The loan applications from units
under MSE sector will be disposed off within a reasonable time as mentioned
below, provided such applications are complete in all respect.

a) Up to 2 lakh 2 weeks

b) Over Rs.2 lakh & up to Rs.5.00 lakh 4 weeks

c) Over Rs.5 lakh 8-9 weeks

 No collateral security for advances up to Rs. 5.00 Lakh engaged in

manufacturing activities.
 Loans sanction without collateral security/third party guarantee up to Rs.
100.00 lakh based on good track record and financial position and is
covered under the scheme of Credit Guarantee Fund Trust for Micro and
Small Enterprises (CGTMSE).
 Composite loan up to Rs.100.00 lakh is considered under single window
concept to MSE (manufacturing) units.
 Quantum of working capital loan: Minimum 20% of projected annual
turnover (Nayak Committee Norms).
 Margin (Stake of Borrowers):

Loan Margin
Upto Rs. 25,000/- Nil
Over Rs.25,000/- upto Rs.5 laky 15-25 %
Over Rs.5 lakh 15-25 % or as Determined
by the Bank.

 Rate of Interest: At very competitive interest rates for loans above Rs.2
lakh with band of BPLR-1.75 to BPLR of the Bank and keeping in view
the credit rating of the borrowal unit.
 Internal credit rating system is in force in the Bank for pricing of the unit.
However, to have a third party opinion services of external agencies like
CRISIL, ICRA etc. may also be hired at reasonable price.
 Loan under technology upgradation fund Scheme (TUFS) for Textile and
Industrial units in Small Enterprises (manufacturing) sector.
 Loan to specified industries in Small Enterprises (manufacturing) sector
under Credit Linked Capital Subsidy Scheme (CLCSS).
 Loans to facilitate technology upgradation for small enterprises
(manufacturing) under Credit Linked capital Subsidy under Technology
Up gradation Fund Scheme (CLCS-TUFS) for Small Scale Textile & Jute
Industries.
 Dedicated services at our specialized SME branches to at Coimbatore.
 SME Loan Processing Hubs in New Delhi, Mumbai & Ernakulam to give
specific focus to MSE units.
 Interaction with our existing as well as potential MSE entrepreneurs at all
of our branches particularly in specialized SME branches for furthering
quality of service.
 A grievance redressal mechanism is in place at our branches/Regional /
Zonal offices and Corporate office to redress customers’complaints /
issues related to banking.