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MSME

 

Target group

 

Civil Contractors, Mining Contractors, Engineering Contractors, Transport Contractors etc established as Proprietorship / Partnership firms, Limited Companies

Eligibility

 
  • Engaged in the business line at least for the last 3 years
  • Having Audited Financial Statements
  • Entry level credit rating should be SBS 5. No deviation to be considered.

Purpose

 

For meeting working capital needs

Nature of facility

 

Line of Credit by way of fund based working capital limit, Bank Guarantee/ letters of credit

 

Quantum of Limit

 

Minimum Rs.10 lacs and Maximum Rs.500 lacs

Appraisal of loan

 
  • 30% of last two years average turnover.
  • Of this, 2/3rd will be used for Fund Based facility and 1/3rd for Non-fund based facility such as BG/LC.
 

Margin

 

Minimum 20% for fund based facility. Though the limit will be treated as unsecured, contractors will have receivables which should be charged to the Bank and a margin of 20% maintained thereagainst.

Minimum 15% cash margin for non-fund based facility

 

Rate of Interest

As per prevailing rate of interest structure in terms of HOBC:104/94 dt. 15-11-2010

No collateral security/third party guarantee to be obtained.

Processing Fee, Documentation charges, Commitment charges etc

 

For accounts falling within regulatory definition of MSME : In terms of HOBC : 102/218 dt. 20-03-2009. (MSME accounts within regulatory definition are exempt from commitment charges)

For accounts not falling within regulatory definition of MSME but within the new definition of SME : In terms of HOBC: 102/119 dt.19-09-2008.

Security

 

Primary :

  • First charge on the unencumbered assets of the company/firm both current and fixed assets.
  • Margin on non fund based limits.
 

Collateral :

Suitable collateral to be obtained so that asset cover of 1.50 is maintained.

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