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SMB

P&SB Credit to Small Enterprises

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CIOL Bureau
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BANGALORE, INDIA: Salient features of Bank’s MSME  policy.

  •     The Bank  continues to lay emphasis on financing Micro, Small & Medium enterprises

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  •     Policy Package of Govt. of India 2008 shall continued to be supported and popularized amongst our branches.
  •     Bank’s Endeavor is  to achieve high growth in MSME advances .
  •     Industrial units in the clusters shall be financed.
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  •     The Bank has specialized 11 MSME branches namely Reid Road Ahmedabad, Dhuri ,  Batala, Kukar Majra , Mandi Gobindgarh, Panipat , Phase —V Mohali ,Ludhiana, Jalandhar, Godhewala and Lalru  to support finance to MSME units. The Bank will endeavor to consider opening more such branches in the coming years.
  •     The various service sector enterprises shall be financed taking advantage of the new investment limits in equipment under MSMED Act 2006.
  •     The Bank is financing loans up to Rs.100 lakh for Small Enterprises under the Credit Guarantee Scheme of CGTMSE.  The Bank has made a provision to bear upfront guarantee fee /ASF for loans upto Rs.5 lac under the scheme.
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  •     In line with RBI’s policy of “Financial Inclusion”, micro-finance (SHG-Bank Linkage Programme) has been identified as one of the thrust area for  lending.

    • Eligibility

    The enterprises are defined on the basis of their engagement in manufacturing sector or service sector as under:

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    Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below:

    •     A micro enterprise is an enterprise where investment in plant and machinery  (original cost excluding land, building and other specified items)  does not exceed    Rs. 25 lakh>
    •     A small enterprise is an enterprise where the investment in plant and machinery (original cost excluding land, building and other specified items) is more than Rs. 25 lakh but does not exceed Rs. 5 crore.
    •     A medium enterprise is an enterprise where the investment in plant and machinery (original cost excluding land, building and other specified items) is more than Rs.5 crore but does not exceed Rs.10 crore.

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    (b) Enterprises engaged in providing or rendering of services:-

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    •     A micro enterprise is an enterprise where the investment in equipment does not exceed Rs.10lac
    •     A small enterprise is an enterprise where the investment in equipment is more than Rs.10lakh but does not exceed Rs.2 crore;
    •     A medium enterprise is an enterprise where the investment in equipment is more than Rs.2 crore but does not exceed Rs.5 crore.

    These will include small road & water transport operators, small business, professional & Self-employed persons and all other service enterprises

    Extent of Collaterals:

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    •     No collateral to be insisted for MSME cases with credit limit up to Rs.10 lacs in all new loans sanctioned to these units (both manufacturing and services) as defined under MSMED Act, 2006.  Units financed under the Prime Minister Employment Generation Programme of KVIC for extending collateral free loans are  included in MSE sector.
    •     No collaterals is insisted in cases with guarantee cover of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) up to the limits set and revised by the Trust.  Presently the CGTMSE cover is available for eligible advances upto Rs.100 lacs. As per existing policy bank will bear Guarantee Fee / Annual Service Fee for loans upto Rs.5 lac

    SME-Clusters Approach:

    Special emphasis shall is  laid to adopt Cluster approach in MSME lending in 149 identified districts by SIDBI and the clusters identified by United Nations Industrial Development Organization (UNIDO)

    Source: www.psbindia.com