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1
SME POWER CURRENT ACCOUNTS
Category Current account
Name POWER PACK
Product code Product description
5096-2401 CA-POWERPACK-PUB OTH-ALL-INR
QAB (Quarterly Average Balance)
Rs 5.00 LACS Charges set in the CBS system
Penalty for non maintenance of QAB
Rs.10,000/ - per quarter --do--
Penalty for closing account within 12 Months
Rs.5000/- --do--
CASH TRANSACTIONS
Cash deposit at Home Branch
Unlimited free, no charges Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
Free Charges with Rebate set in the CBS system
Cash withdrawal in Home Branch
Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
Free Non home Charges with Rebate set in the CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque Free To be charged manually (Concession available only in home branch)
Outstation Cheque collection 25% of normal charges To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2. When funds are transferred
Free Charges set in the CBS
system
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from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Issue charge –free Tr. Charge -
free
Corporate Internet Banking Available
ATM cum debit card
International card with withdrawal limit of Rs.50,000 per day(Power Pack card to be issued)
RTGS Free NEFT Free
Standing Instructions Free
Issue of duplicate statements Free
Issue of cheque books (Other than Multicity cheques)
Free
Car Loans Pre approved car loans for promoters
Demat services Free in the name of the firm/corporate
eZ trade Free in the name of the firm/corporate
Salary accounts All category of salary accounts for the employees of the firm/corporate
Category Current account Remarks Name POWER PREMIUM
Product code Product description
5096-2411 CA-POWER PREMIUM-PUB OTH-ALL-INR
QAB (Quarterly Average Balance) Rs.4,00,000/- Charges set in theCBS
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system
Penalty for non maintenance of QAB Rs9,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.4000/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.30lacs free per month, For amount above Rs.30lacs @ Rs.25/- per lac or Part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
25% of normal charges [0.05% of amt deposited; Min Rs.25/- + normal Cash handling free]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
25% of normal charges (Re0.50/Rs.1000/-) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs.0.25/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection 25% of normal charges To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra cityFree Charges set
in the CBS
system Inter city- 25% of normal charges (Re.0.375/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge –free Tr. Charge - free Corporate Internet Banking Available ATM cum debit card International card with withdrawal limit
of Rs.50,000 per day(Power Pack card to be issued)
RTGS Free NEFT Free
Standing Instructions Free Issue of duplicate statements Free
Issue of cheque books (Other than Multicity cheques)
Free
Car Loans Pre approved car loans for promoters
Demat services Free in the name of the firm/corporate eZ trade Free in the name of the firm/corporate
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Salary accounts All category of salary accounts for the Employees of the firm/corporate
Category Current account Remarks Name POWER PRIVILEGE
Product code Product description
5096-2421 CA-POWER PRIVILEGE-PUB OTH-ALLINR
QAB (Quarterly Average Balance) Rs.3,00,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.8,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.3000/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.25lacs free per month, For amount above Rs.25lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the
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amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
30% of normal charges [0.06% of amt deposited; Min Rs.25/- + normal Cash handling free]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
30% of normal charges(Re0.60/Rs.1000/-) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs.0.30/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection 50% of normal charges To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra cityFree Charges set
in the CBS
system Inter city- 30% of normal charges
(Re.0.45/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge –free Tr. Charge - free
Corporate Internet Banking Available ATM cum debit card
International card with withdrawal limit of Rs.50,000 per day(Power Pack card to be issued)
RTGS Free
NEFT Free Standing Instructions Free Issue of duplicate statements Free
Issue of cheque books (Other than Multicity cheques)
Free
Car Loans NA Demat services Free in the name of the firm/corporate
eZ trade Free in the name of the firm/corporate Salary accounts All category of salary accounts for the
Employees of the firm/corporate
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Category Current account Remarks Name POWER ADVANTAGE
Product code Product description
5096-2431 CA-POWER ADVANTAGE-PUB OTH-ALLINR
QAB (Quarterly Average Balance) Rs.2,00,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.7,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.2000/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.20lacs free per month, For amount above Rs.20lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
40% of normal charges [0.8% of amt deposited; Min Rs.25/- + normal Cash handling free]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
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Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
40% of normal charges(Re0.80/Rs.1000/-) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs.0.40/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection 50% of normal charges To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra cityFree Charges set
in the CBS
system Inter city- 40% of normal charges
(Re.0.6/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge –free Tr. Charge - free Corporate Internet Banking Available ATM cum debit card
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued)
RTGS Free
NEFT Free
Standing Instructions Free
Issue of duplicate statements Free Issue of cheque books (Other than Multicity cheques)
Free
Car Loans NA
Demat services Free in the name of the firm/corporate eZ trade Free in the name of the firm/corporate
Salary accounts Silver & Gold salary Accounts for all Employees of the firm
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Category Current account Remarks Name POWER GAIN
Product code Product description
5095-2401 CA-POWER GAIN-PUB OTH-ALL-INR
QAB (Quarterly Average Balance) Rs.1,00,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.6,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.1000/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.15lacs free per month, For amount above Rs.15lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
50% of normal charges [0.1% of amt deposited; Min Rs.25/- + normal Cash handling applicable]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
50% of normal charges. 0.1% of amount encashed. Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs.0.50/1000] ;
To be charged manually (Concession
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Min-Rs.25; Max-Rs3000
available only in home branch)
Outstation Cheque collection 50% of normal charges To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra city free Charges set
in the CBS
system Inter city- 50% of normal charges
(Re.0.75/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge –free Tr. Charge - free
Corporate Internet Banking Available ATM cum debit card
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued)
RTGS Free
NEFT Free Standing Instructions Free
Issue of duplicate statements Free
Issue of cheque books (Other than Multicity cheques)
Free
Car Loans NA
Demat services Free in the name of the firm/corporate
eZ trade Free in the name of the firm/corporate Salary accounts Silver & Gold salary Accounts for all
Employees of the firm
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Category Current account Remarks Name POWER SUPER
Product code Product description
5095-2411 CA-POWER SUPER-PUB OTH-ALL-INR
QAB (Quarterly Average Balance) Rs.75,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.5,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.900/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.10lacs free per month, For amount above Rs.10lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
75% of normal charges [0.15% of amt deposited; Min Rs.25/- + normal Cash handling applicable]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
75% of normal charges. (Re 1.50/1000) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs.0.75/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/- per instrument© above
To be charged manually
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Rs.1,00,000/ -:Rs.150 per instrument
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra cityFree
Charges set
in the CBS
system
Inter city- 75% of normal charges
(Re1.125/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge – free Transaction charges – Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)
Corporate Internet Banking Available ATM cum debit card
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued)
RTGS Flat Rs.25/- per transaction NEFT Free
Standing Instructions Normal Charges Issue of duplicate statements Normal Charges
Issue of cheque books (Other than Multicity cheques)
Rs.1.00 per cheque leaf other conditions to remain
Car Loans NA Demat services Free in the name of the firm/corporate
eZ trade Free in the name of the firm/corporate
Salary accounts NA
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Category Current account Remarks Name POWER LITE
Product code Product description
5095-2421 CA-POWER LITE-PUB OTH-ALL-INR
QAB (Quarterly Average Balance) Rs.40,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.4,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.800/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.6 lacs free per month, For amount above Rs.6 lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
80% of normal charges [0.16% of amt deposited; Min Rs.25/- + normal Cash handling applicable]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
80% of normal charges. (Re 1.60/1000) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs1.00/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/- per instrument© above Rs.1,00,000/ -:Rs.150 per instrument
To be charged manually
13
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra cityFree
Charges set
in the CBS
system Inter city- 80% of normal charges
(Re1.2/Rs.1000) Min Rs.25/- MaxRs.1250
Multicity cheque facility Issue charge – free Transaction charges – Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)
Corporate Internet Banking Available ATM cum debit card
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued)
RTGS Flat Rs.25/- per transaction NEFT Free Standing Instructions Normal Charges
Issue of duplicate statements Normal Charges
Issue of cheque books (Other than Multicity cheques)
Rs.1.00 per cheque leaf other conditions to remain
Car Loans NA Demat services Free in the name of the firm/corporate
eZ trade Free in the name of the firm/corporate Salary accounts NA
Category Current account Remarks Name POWER BASE
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Product code Product description
5095-2401 CA-POWER BASE-PUB OTH-ALL-INR
QAB (Quarterly Average Balance) Rs.20,000/- Charges set in theCBS system
Penalty for non maintenance of QAB Rs.3,000/- per quarter --do--
Penalty for closing account within 12 months
Rs.750/- --do--
CASH TRANSACTIONS
Cash deposit in Home Branch Upto Rs.4 lacs free per month, For amount above Rs.4 lacs @ Rs.25/- per lac or part thereof
Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions
Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually
90% of normal charges [0.18% of amt deposited; Min Rs.25/- + normal Cash handling applicable]
Charges with Rebate set in The CBS system
Cash withdrawal in Home Branch Unlimited -Free
Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually
90% of normal charges. (Re 1.80/1000) Min Rs.25/-
Non home Charges with Rebate set in The CBS system
NON CASH TRANSACTIONS
Drafts/Bankers’ cheque [Rs1.25/1000] ; Min-Rs.25; Max-Rs3000
To be charged manually (Concession available only in home branch)
Outstation Cheque collection Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/- per instrument© above Rs.1,00,000/ -:Rs.150 per instrument
To be charged manually
Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account
Intra city free
Charges set
in the CBS
system Inter city- 90% of normal charges
(Re1.35/Rs.1000) Min Rs.25/- MaxRs.1250
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Multicity cheque facility Issue charge – free Transaction charges – Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)
Corporate Internet Banking Available ATM cum debit card
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued)
RTGS Normal Charges
NEFT Normal Charges Standing Instructions Normal Charges
Issue of duplicate statements Normal Charges Issue of cheque books (Other than Multicity cheques)
Rs.2.00 per cheque leaf other conditions to remain
Car Loans NA
Demat services NA eZ trade NA
Salary accounts NA
RATIONALE:
� Foray of Private Sector and Foreign Banks with innovative products in the SME sector.
� Novel liability products and services are being introduced for providing value addition to customers.
� To incentivize customers for keeping high balances in their accounts. � As current accounts are an important source of interest free funds for banks. � Made to order current account products � Customers can choose a facility based on a QAB where they get the optimum
advantage. � The products have ‘Best in Class’ features compared to competitors’ products.
SAHAJ CURRENT ACCOUNT
Category CURRENT ACCOUNT
Name SBI-SME – SAHAJ Target Group Individuals/Proprietorship Firms/
Partnership Firms/ engaged in any business activity
Purpose To provide basic banking facility to the low profile business community
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Minimum Deposit Rs.1000/- (No OD will be permitted in the account)
Product code 5040 2401 Branches which can open this account
All branches where ATM and internet Banking facilities are available
Cheque Book facility �Number of cheque leaves to be issued per financial year to be restricted to 25 leaves with a charge of Rs. 5 per leaf �Additional requirement of further cheque leaves may be permitted with a charge of Rs.10 per leaf. �Drawings per cheque is limited to Rs.15,000/- Each cheque leaf to carry this inscription.
Cash withdrawals �The account holder may withdraw cash up to permissible limit of Rs.15,000/- through ATM facility. No cash withdrawal is permitted at the cash counter of the Branch. � For payment to merchant establishments, the account holder may use the debit card, internet banking, cheque book or by means of draft.
Limits for Cash Remittance Per Day
The account holder is permitted to remit Cash to the extent of Rs.10,000/- on any one
Facilities Offered �ATM cum Debit Card facility
� Free Internet Banking Facility
� Transfer of Funds to other accounts at the branch free of charge
� Standing Instructions for payment of loan installments at the branch free of charge.
� Standing Instructions for payment to other accounts for a fee of Rs.50/- per transaction. � ECS facilities available at select
branches for payment of telephone bills, Insurance Premia at
applicable charges.
� Immediate credit of outstation Cheques up to maximum amount of Rs.15,000/- per cheque.
17
� Collection of outstation cheques at normal charges
� Transaction of Inward Bill business at normal charges
Penalty for non maintenance of minimum balance
Rs.300/- per quarter
Documents Required � Two Photographs.
� Copy of Partnership Deed / Copy of Certificate of Registration under Shop & Establishment Act as applicable. � Introduction by an Account holder
Others Terms and conditions such as adherence to KYC procedure obtention of photograph/IT PAN/Form 16 sending of letter of thanks, classification of dormant/inoperative account, as applicable to ordinary current account will be applicable.
RATIONALE: � To make financial inclusion of SME entrepreneurs like cottage industry units,
traders, petty shop-keepers, hawkers, vendors, autorickshaw and other small transport operators etc. who have small means are not able to have account with the Bank.
� Such SME units need transaction accounts to accumulate their daily surpluses, make statutory/utility payments like taxes, phone bills, insurance premium, electricity bills etc.
� To enable recovery of installments on the loan given on repayment basis. � To maintain accounts distinctly by this segment from their personal holdings.
18
POWER JYOTI CURRENT ACCOUNT
Category CURRENT ACCOUNT Name POWER JYOTI
Purpose To provide collection facility for institutions through our core banking branches (i) Usual fee collection for educational Institutions (ii) Competitive examination fee collection (iii) Donor collections for charitable organisations (can be customised as per client needs)
Product code 5091-2401 Quarterly Average Balance (QAB)
Rs. 25,000/-
Penalty for non-maintenance of QAB
Rs. 1000 per quarter
Penalty for closing the account within 12 months
Rs. 500
Permitted type of Transactions
Cash, transfer and clearing
Transactions not supported Batch and trickle feed transactions not supported
OD Facility No Overdraft is permissible Charges for transaction The institution (a/c holder) is not charged for
fee collection. A commission of Rs.50/- may be collected from the remitter separately (manually) and may be credited to their (non home branch) commission account. CGM of the Circle, where account is maintained, has the discretion to reduce the commission upto Rs.20 per challan.
Cash handling charges Waived Transactions not permitted Transactions other than fee collection/donation
not permitted
Cheque book facility Cheque book facility not available. The Institution can transfer the required balance through authorization/sweep
Corporate Internet Banking Facility
Available - free
Branches which can open this account
All Branches
Method of collection at the receiving branch
� Specific three part challan to be used for remitting fees. One copy to be kept with the Branch and the other two to be given to
19
remitter (after realization if remitted through clearing instrument). The challans to be filled up and submitted to the Branch by the student/remitter. The Institutions can arrange for challans with account number and all the required details, either printed or downloaded from Institution’s website. � Collecting branches to feed all the relevant particulars in the challan while receiving the fee and to collect the charges separately as per instructions given in the challan format
Activation of fee collection module
Once the Power Jyoti account is opened with 5091- 2401 as the product code from the Core Option, second tab appearing on the top of the screen “Statement/Mail option /Fee collection” is to be chosen to activate the fee collection module for the product. Under fee collection header field “Receipt type” the appropriate option (School fee, Competitive Examination Fee/Brokers etc) is to be chosen according to the requirement of the customer. Once appropriate option is chosen and activated, Power Jyoti can be used for opted facility, and the corresponding screen will be accessible for posting the details of challan Those accounts which are already been opened without activating Fee option or others, the option can be activated through “Amend” option. (Main Menu�Deposit CC/OD Accounts and Services�Amend�Amend Deposit tabbed screen)
Facilities/features Usual fee collection for Educational Institutions
� Any type of fees like School/college/university fee, can be collected through any of our CBS Branch.
� Different types of fees (upto 10 items) can be collected through a single challan. The classification for the 10 fee fields in the challan are from A to J. Institutions to be advised to print their challans grouping the fees into these ten categories with the alphabets (A to J) printed as the group heading so that there is no overlapping of fees in the same field at the time of remittance of fees at the branch. Users (Single Window Operators) at the front end of
20
the Branch need to capture the fee break up against the field provided for the alphabet. There is also a validation for the break up with the total amount already put through. � The functionality has a provision to capture 17 digit alpha-numeric number as the reference no. The enrolment no. or Reference No., if coded suitably to indicate the Course, year of study, term of the fees and specific identifier no. of the student, will help the Institution to reconcile the entries with other details captured by the users.
� Account No., name of the Institution, Journal No. and amount of remittance will appear in the fields . ID/Ref. No, name of the student, Application/Challan No. and Course/Class name are mandatory and to be entered by the User. � The additional details captured would be given to the home branch of the account and in turn to the institution, in extract containing Trxn Branch code, Date of trxn., journal No., Total, ID/Ref. No. (17 AN Character), Name of the Student , Application /Challan No., Class/ Course and the breakup of A to J in the same order. Competitive examination fee collection o Any type of fees for competitive examination, recruitment drive etc can be collected through any of our CBS branches. o The functionality has a provision to capture 17 digit alpha-numeric number as the Registration ID/Ref No. and the Name of applicant. Both field are mandatory and has to be entered by the user at the Branch. o The details captured is available to the Institution through statements/CINB, which will help the Institution to reconcile the entries o This facility can be customised and can be offered for various collection purposes. Necessary challans may be devised and advised to the customer by the Branch. General � A Journal number will be generated by the System. � Journal No. (Host Trace Number) would be
21
entered in the challan copy given to the remitter. This number will be appearing in the statement, and also can be viewed by the Institution through statement/CINB. � The Institution can also view the Remitting Branch Code, Journal No., Reference No. and Name of the student/applicant through CINB.
Documents Required � Usual procedure for opening institution accounts to be followed
� Terms and conditions such as adherence to the KYC procedure, obtaining photograph (wherever necessary) / IT PAN / Form 60 sending of letter of thanks, as applicable to ordinary current account will be applicable.
Power Jyoti for Brokers The Power Jyoti accounts for the brokers will be opened at Capital Market Branch, Mumbai. Branches and franchisees of the broking firms from other centers will bring local cheques for credit for these accounts (outstation cheques are not to be accepted), with a special challan form. The salient element of the account is to provide Cheque collection facility for broking houses at various centers, with assured MIS as per the format required by them. The product has been configured to capture the required MIS and offer the same to broking houses through statement of accounts, CINB and other media.
RATIONALE:
� Product designed for Institutions, charitable organizations etc., using the
generic fee collection functionality developed by our IT Department, for collection purpose
� Account holders can also get the MIS through internet banking (CINB) on a real time basis.
� The product can be customized and offered to customers for competitive examination fee collection, donor collections etc.
22
SURABHI DEPOSIT SCHEME
Category SAVINGS & CURRENT ACCOUNT Name SURABHI
Purpose To Provide a scheme with option for sweep and reverse sweep to meet the requirements of trusts and other organizations that have cash accruals needing safe investment options.
Eligibility Corporates / Institutions / Trusts / Small & Medium Enterprises who manages the P F / any other trust account of their employees.
Nature of Deposit Savings & Current Account linked to Corporate Liquid Term Deposit. The nature of deposits such as Term Deposit / Special Term Deposit to be incorporated in the application form.
Product code SB - 1088 2401 CA – 5088 2401
Period for Term Deposit � Minimum – 12 months � Maximum – 36 months The period of deposit to be fixed by the depositor initially and the same is incorporated in the application form.
Minimum Amount of deposit to be maintained
� For Current Account – Rs.10,000/- � For Savings Account – Rs.1,000/-
Operation of the Account
� The balances in the Savings / Current account will be transferred automatically by means of auto sweep facility to term deposit / special deposit account on a weekly basis, whenever there are surplus funds in the account. � The tenure of deposits will be decided by the depositor at the time of opening the account. � The threshold limit in the operation account to be maintained will be at Rs.50000/-. (The excess amount over and above the said balance will be transferred to Term Deposit Account). � In case of inadequate balance in the savings/ current account for payment of a cheque, the shortfall amount is broken from the fixed deposit, in multiples of Rs.1000, and the cheque is honoured, without any hassle to the customer through reverse sweep facility. The business rule of LIFO– Last in First Out – will be followed. � A mandate for transfer of funds from current/
23
savings account to fixed deposit and for withdrawal from fixed deposit through auto sweep and reverse sweep to be obtained from the depositor at the time of opening the account and kept on record. � Deposits broken through reverse sweep will be paid interest as per the card rates for such period applicable as at the date of opening of such deposits with penalty as applicable for premature withdrawal.
Rate of Interest of Term Deposit
As applicable for Term Deposit for the tenure the deposit is contracted. No differential rate of interest is applicable.
Loan Facility No Overdraft / Loan facility is permissible
Branches which can open this account.
All Branches.
Documents Required � Two Photographs of each of the persons authorized to operate the account. � Copy of Partnership Deed / Copy of Certificate of Registration under Shop & Establishment Act/ Copy of Memorandum & Articles of Association as applicable/ Copy of Trust Deeds / Copy of Resolution for maintaining account with the Bank. The documents should be verified with the original by an officer of the Bank. � Introduction by an Account holder.
Others Terms and conditions such as adherence to the KYC procedure, obtention of photograph / IT PAN / Form 60 sending of letter of thanks, as applicable to Savings / Current account will be applicable.
RATIONALE:
� To cater to that section of non-individual customers who have surplus funds for investments, but at the same time need the convenience of liquidity.
� It provides value addition to the top Corporates / Institutions � Accounts under SURABHI Scheme are SB/Current accounts with auto sweep
and reverse sweep facility. � Unfixed deposits
24
CIRCULAR REFERENCES: Product Sl.
No Circular No & date eCircular No
SME Current Accounts
1 SME/L&TP/Circular No.04/2006-07 dated 06.06.2006
104/2006-07
2 SME/L&TP/Circular No.19/2006-07
dated 31.10.2006 392/2006-07
3 SME/L&TP/Circular No.30/2006-07 dated 03.03.2007
680/2006-07
4 SME/L&TP/Circular No.08/2007-08 dated 19.02.2008
673/2007-08
5 SME/L&TP/Circular No.24/2007-08 dated 10.03.2008
722/2007-08
6 SME/L&TP/Circular No.27/2008-09 dated 15.10.2008
406/2008-09
7 SME/L&TP/Circular No.34/2008-09 dated 03.11.2008
462/2008-09
8 /SME/-POWER CA/33/2010 - 11 July 17,2010.
SBI Shakti Current Account
1 SME/L&TP/Circular No.07/2009-10 dated 13.05.2009
115/2009-10
Sahaj Current Account 1 SME/L&TP/Circular No.09/2006-07 dated 01.08.2006
239/2006-07
2 SME/L&TP/Circular No.09/2007-08 dated 07.07.2008
672/2007-08
Power Jyoti Current Account
1 SME/L&TP/Circular No.13/2008-09 dated 14.03.2009
192/2008-09
2 SME/L&TP/Circular No.60/2008-09 dated 14.03.2009
733/2008-09
3 SME/L&TP/Circular No.02/2009-10 dated 08.04.2009
64/2009-10
Surabhi Deposit Account
1 SME/L&TP/Circular No.07/2007-08 dated 14.08.2007
287/2007-08
Note: Circulars issued upto 31.01.2011 have been included
25
MULTI CITY CHEQUES FOR SME CUSTOMERS
1. GENERAL � A Multi-City Cheque(MCC) is one that can be written by the customer in favour of his client and payable at par at all Core Banking branches of the Bank. The payee can present the cheque directly at any Core Banking branch or in clearing through his banker.
� MCCs can be issued by any branch. � MCCs are payable at par at all branches. � MCCs can be issued in existing/new SB, CA and CC
accounts, in addition to normal cheque books. � Personalized cheque books with customer details are
issued to customers. � The MCC facility is available to the Customer, only
through the prescribed cheque leaf issued for the purpose.
� The specimen signature of the customer / authorized signatories of the account along with the mandate must be made available in the central database in CBS so that the same can be verified by the paying branch.
� Issuing branches should update signatures / mandate in Core Banking whenever the same is modified by the account holder(s).
� The MCC facility is to be used only for genuine transactions / bonafide remittances.
� The customer shall return all unused cheque leafs to the branch, before closure of account or on discontinuation of the MCC facility
� Branches should update all the particulars of account in the
system before indenting for MCCs, as the particulars available in
the system will be printed on the cheque book via straight through processing.
2. ELIGIBILITY CRITERIA FOR ISSUE OF MCCs
2.1 Branches
2.2 Customers
All branches are enabled to issue MCCs
� � MCCs may be issued to customers who have opened accounts under SME Power Gain Current Account and SME Power Pack Current Account. In other cases, including borrowal accounts, Branch Manager can take a decision to extend the facility based on satisfactory operations in the accounts.
� Application cum acceptance letter (appended at Annexure) to be obtained from customers. The charges applicable for issuance of MCC should be explained to the customers before enlisting their names.
3. UPPER LIMIT FOR ISSUE OF MCCS
SME customers – Can issue MCC for a maximum amount of Rs. 10 lacs
26
4. PROCEDURE FOR ISSUING MCCs
Branches can indent for MCCs to the LCPC linked to them. CBS Menus are to be used for indenting cheque book issue request from customers. The cheque books will be directly despatched by LCPC to the customer.
5. CHARGES FOR MCCs 5.1 Issue charges : 5.2 Transaction (payment charges)
� Rs. 3 per cheque leaf � Free for Power Pack CAs � Issue charges will be debited to customers account
by the system. � Cheque amount upto Rs. 5 lacs – Rs. 25 per cheque � Cheque amount above Rs. 5 lacs to Rs. 10 lacs - Rs.
50 per cheque � Free for Power Pack CAs
Transaction charges will be credited to the income account of paying branch by debit to drawer’s account by the System.
6. MCC PAYMENTS 6.1 Cash payments at other centers 6.2 Guidelines for paying branches for payment of MCCs.
No cash payments allowed at non home branches for SME customers. � All branches are designated to pay MCCs when
presented to them. � Service branch is the designated branch to make
payment of MCCs received through clearing. � The MCC paying branch will use the CBS platform
for verification of balance, signature(s), mandate and post the cheques by direct debit to the respective accounts. They may return the cheques for reasons such as insufficient balance or signatures not tallying etc.
� MCCs drawn on borrowal accounts may be paid based on the availability of drawing power, if otherwise in order. Paying Branch should not override the DP of loan account holders while paying MCC, under any circumstances.
� Paying branch should key in the complete name of payee while paying MCC so that name of payee will appear in MCC report at home branch.
27
Annexure
Multicity cheques – Application-cum acceptance letter
The Branch Manager, State Bank of India, ______________Branch, Date : Dear Sir, Multi City Cheque (MCC) Facility Savings Bank /Current /Cash Credit account No.__________________________
I / we request you to arrange for extending Multi City Cheque (MCC) facility for my/our above mentioned account maintained with you. I / we have gone through the terms and conditions for extending the MCC facility, as given below and accept the same. Terms & Conditions: 1. The Multi City Cheque (MCC) is payable at any branch of State Bank of India (SBI). 2. The MCC facility is to be used only for bonafide transactions/ purposes. 3. No cash payments will be made on Multi City Cheques 4. Payment of MCC will be made only through the cheque leaf issued for the same and if it is in order, subject to availability of clear balance/ funds / drawing power in the account and signature of drawer(s) tallies with the mandate & signature(s) available in the Core Banking System (CBS). 5. The service charges for issue / payment / return / stop payment instructions in respect of MCCs, as fixed by the Bank, are payable from the respective account from time to time. SBI may change / modify the service charges associated with MCC facility periodically. Applicable charges can be ascertained from the Bank’s website and also from the branches. 6. The Bank has the sole discretion to decide to provide / continue/ terminate the facility or reject the request for MCC facility at any point of time without assigning any reason whatsoever. 7. The accountholder(s) will indemnify the Bank against any third party claims, loss or damages caused to the Bank due to his/ her/ their negligence or fraud by any third party in respect of MCC facility granted. 8. All unused cheque leaves will have to be returned to the branch, before closure of account or on discontinuation of the MCC facility. 9. The Bank shall not be responsible on account of failure to make payment of MCC because of reasons beyond the control of the Bank such as technical snags, communication breakdown etc. 10. The Bank shall have no obligations to any third party including any beneficiary other than the account holder for the execution of any MCC payment instruction. Yours faithfully, Signature of Account holder (s)
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INTER CORE TRANSACTIONS We are offering concessions on inter-core transactions for various Power Current Account clients. To give better value to those customers who can be rated higher in their relationship with us, We are offering concessions based on a customer rating grid, as given here below to be used for offering 25%, 50% or 75% concessions in inter-core transactions. CBS has the facility of parameterising concessions as a percentage of the standard charges, customer-wise or account-wise. The method of levying charges are spelt out in the various Power Current Accounts schemes discussed in the foregoing pages. Customer rating grid SME & MCG Accounts
Value of connection grid Parameter Score Parameter Score Parameter Score
FB limits > 25 crores 5 >10 crores 3 >1 crore 1 Int. rate on limits
>PLR 5 PLR 3 1% below PLR
1
Exchange & Commision income
>25 lacs 5 >15 lacs 3 > 5 lacs 1
Liability connection
Avg CASA >50 lacs
5 Bulk >25 cr 2 >100 cr
Cross Selling Salary a/c>250
5 MF investment >25 cr
5 Channel Finance > 25 cr
5
Insurance cross sell Commission >1 lac
5 Tie up for personal loan to staff
3 SME car loan >1 cr
3
Total points that can be scored = 50 Total points scored > 25 - upto 75% concession in Core power charges Total points scored > 15 - upto 50% concession in Core power charges Total points scored > 08 - upto 25% concession in Core power charges Exchange + Commission income, Liability value, insurance cross sell value, MF investment, relate to the past financial year.
29
BUSINESS TO BUSINESS PAYMENT SOLUTION
We have a widespread network of branches as also a very strong base of alternative channels like ATMs, robust Internet Banking portal, etc. There is a great demand from large Corporates., who have dealership and agency networks to have a sound platform for B2B payments. In this context, we have engaged FSS Ltd, who have developed an IT based solution for B2B payment that provides online funds transfer as well as MIS to all the parties involved i.e., the Corporates, the dealers and the Bank. The salient features of the solution are placed below:
� The solution can be operated on multiple channels like ATM, Internet, Point of Sales Machines (POS), Mobile phones and through Letter of Authority.
� Creates a virtual Closed User Group of the large Corporate and their dealer network.
� The accounts are pre-defined by the account holders and linked in advance.
� Funds transfer can be effected by the dealers using multiple options, such as, ATM, Internet, POS, Mobile phones. We are presently offering it through ATM channel. We will offer it through debit card payment gateway in Internet and Letter of Authority in future. Other options like POS, Mobile banking etc. will be offered as and when we have addressed security aspects.
� The dealer/ agents, who desire to have this facility, will have to open Current Accounts with the branches in their area of operation. They will be provided with debit card facility. The accounts will be mapped through a registration process to be initiated by the dealers/ agents. Subject to balance being available in such accounts, dealers/agents can transfer funds using ATMs.
� The back end software and services of FSS will recognize successful transactions and upload the MIS on a real time basis to the database of the Corporate. This will enable simultaneous release of goods/services by the Corporate to the agent/dealer.
� The solution also provides functionality for the Corporate to give a file containing agent-wise list of debits to be raised. The software will enable a designated officer of the Bank to authorize such debits – based on the letters of authority obtained from the agents. Successful debits will update the MIS in the Corporate’s system.
� Dealers and agents having multiple dealerships would be encouraged to open dedicated Current Accounts for each of their agencies, to avoid any errors in transfer of funds to the right account.
� Fund settlement with the Corporate will be done on T+1 day basis after reconciliation with the MIS to be provided by FSS.
� Corporates shall bear the cost of funds transfer, to be paid at monthly intervals at the branch where they maintain the principal account
3. We have started the solution with Airtel and Reliance and plan to extend it to more corporates. The documents required in opening the account of the dealers / agents of the corporates and other terms are placed in Annexure – I & II. Steps have to be
30
taken for opening current account of the dealers / agents of the Corporates after fulfilling KYC norms. The details of number of accounts opened may be advised to this office at monthly intervals for our information and record.
Dealers can also open Sahaj current account with a minimum balance of Rs.1000/-
Opening in a central place
It has been decided that the Current Accounts under the captioned solution will be opened in a centralized location, identified by the Circle.
31
Annexure-I
Process flow for opening of accounts of dealers at a central place
� Corporate will arrange to collect application forms from all dealers together with enclosures as per the checklist already provided to them.
� Corporate will also furnish a letter certifying that all the accounts are of their authorised dealers and that the information furnished are correct to the best of their knowledge. Corporate will also provide with a soft copy of account details of all accounts to be opened in excel form conforming to the bulk opening format of the Bank.
� These accounts will be opened at a single branch, through bulk account opening option.
� Signature of authorised signatories will be scanned and uploaded in the system centrally.
� Account opening forms with other enclosures will be sent to the Home Branch by courier immediately. Along with this, Circle will also send a copy of the B toB circular issued by them for ready reference for the branches concerned.
� At the same centre, file will be uploaded for all the accounts for issue of ‘Powergain ATM Cards’.
� These accounts will then be changed for their ‘home branch’ to the branches against which the dealers have been mapped already.
� Corporate will be advised of all the account numbers of the dealers with home branch names.
� The dealers will have to visit the home branches concerned. Branch officials will sign the KYC verification portion of the account opening form after brief interaction with the dealer. Dealers would make the initial deposit into the accounts.
� Home Branch concerned will verify the signature of authorised signatories and issue them with necessary cheque books.
� Powergain ATM cards will be delivered directly to the dealers at the address specified.
� ATM PIN will be sent to the Home Branches indicated in the account.
� Authorised signatories of the dealers will have to call on the home branch and collect the PIN. The above process will ensure that dealer accounts are opened quickly without much loss of time, the correct type of ATM cards are applied for and that the Branches become familiar with the B toB Scheme as well.
� In respect of all dealers who already have an operative current account, corporate will advise us with the names of dealers, account number and the Branch where the accounts are maintained. We will advise these branches to upload necessary Powergain ATM cards for such accounts.
32
Annexure-II
CHECKLIST FOR BRANCHES
Current Account to be opened � SME Power Pack
� SME Power Gain SME Power Premium SME Power Privilege SME Power Advantage
� SME Sahaj
� Normal Current Account To be opened under C&I or SIB segment (option to choose is with the customer)
Account in the name of Individual / Proprietary firm / Partnership firm / Private Limited Company.
Documents required � Photo Identity Card issued by Government Department in case of individual & proprietor of the proprietary firms. � Photographs of all and authorised signatory of the firm/company.
� Documents such as telephone bill/ electricity bill, establishing the address of office / place of work. � Registration Certificate (shop & Establishment Act, Corporation/ Municipality/Panchayat etc.) from the competent authority to be obtained.
� Letter of appointment issued by the corporate to the dealer [All KYC norms for opening the accounts to be complied with]
Minimum Balance As stipulated in the respective current account opened by the dealer
Cheque Book Issue May be issued if requested
ATM Card Powergain (under SME) will be issued Internet Banking To be made available free of charge Cash handling charges (per day)
Upto Rs.1 lakh – Nil Above Rs.1 lakh- Rs.50 per lakh
Charges for transfer of funds to corporate’s principal account
No charges to be recovered from the dealer/ distributor
Letter of debit authority Letter of authority empowering debit by authorised official of the corporate as per specimen to be obtained, signature of the person to be tallied with the SS on record. Signature on such letter of authority to be in tune with the operating instruction applicable for the account (single or jointly as per the authority structure).
SBI COLLECT MANDATE
33
Date: The Branch Manager, State Bank of India , __________________________Branch Dear Sir, � I hereby instruct you to pay (name of corporate) by debit to my account number__________________with such amounts as may be requested by (name of corporate) from time to time not exceeding Rs._________(Rs.___________ _______________________) at any one instance.
� I confirm that the amounts to be debited from the aforesaid account are variable and may be debited as per the request of (name of corporate) received by you in any form. � Whatever amounts so transferred/ debited/deducted by you from my aforesaid account pursuant to the request of (name of corporate) shall be final and binding on me, and I will not dispute the same.
� I will not revoke or cancel this mandate without giving prior written notice of not less than 30 days to the Bank and (name of corporate) Signature of Customer __________________ Name of customer: ______________________ DETAILS TO BE FILLED UP AND VERIFIED BY THE BANK Name of the Account Holder: Account Number: Account Type: Name of the Branch: Branch Code: Certified that the signature has been verified and that the particulars furnished above are correct as per our records. ____________________ Bank’s Stamp Signature of the Authorised Official from the Bank Specimen Signature Number Name:____________________________
PRODUCT S No Circular No & Date e-Circular No
Multicity cheques 1 SME/L&TP/Cir No. 24/06-07 dated 18.01.2007
563/2006-07
34
Inter-core transactions
1 SME/L&TP/Cir No. 29/2006-07 dated 27.02.2007
653/2006-07
2 SME/L&TP/Cir No. 11/2007-08 dated 29.08.2008
310/2007-08
B 2 B PAYMENT SOLUTION
1 SME/L&TP/Cir No. 24/2006-07 dated 18.01.2007
9/2007-08
2 SME/L&TP/Cir No. 237/2006-07 dated 26.11.2007
521/2007-08
3 SME/L&TP/Cir No. 330/2006-07 dated 16.02.2008
674/2007-08
4 SME/L&TP/8 dated 10.4.08 addressed to Ahmedabad, Bhopal, Bhubaneswar, Chandigarh, Chennai,, Hyderabad, Kolkata, Mumbai & Kerala circles.
5 SME/L&TP/Cir No. 18/2008-09 dated 01.09.2008
310/2008-09
Note: All circulars issued upto 31.01.2011 have been included
35
SME SMART SCORE
1. Target Group Individually managed proprietary/partnership firm or closely held public/private limited companies in the Small and medium industrial and trading sector under C&I and SIB segments.
2. Eligibility *
� The chief promoter /chief executive should be 18 to 65 years of age
� The applicant must obtain a minimum overall score of 60% with a minimum of 50% under each sub-head like Personal details, Business details and collateral details (except in cases where collateral should be asked as per
Bank's norms, where the minimum marks will be nil).
3. Purpose � Working Capital needs � Acquisition of fixed assets
4. Type of facilities
Cash Credit / Term Loan
5. Quantum of Finance
Manufacturing UNITS Rs.5lacs to below Rs.50lacs {20% of annual turnover for WC loan and 67% of project cost for TL} TRADE & SERVICES
Rs.5lacs to Rs.25lacs {15% of annual turnover for WC and 67% of project cost for TL}.
For FB and NFB single exposure limits may be sanctioned to the units. NFB facilities can be sanctioned on the best judgement basis within the discretionary powers delegated to sanctioning authority.
6. Margin 25% for working capital component and 33% for TL component. 7. Rate of
Interest
Size of Credit Limit Repayable on Demand or upto 3 years (% p.a.)
Repayable in 3 years and above (% p.a.)
Above Rs. 5 lacs but below Rs.25 lacs
@SBAR 0.75% above SBAR
Rs.25 lacs and above but upto Rs.50 lacs
0.50% above SBAR 1.25% above SBAR
8. Security: - Primary - Collateral
Hypothecation of stocks and assets financed by Bank As per Bank's extant norms for WC and TLs
9. Processing fees
As applicable to SSI /SBF / C&I units
10. Repayment
� WC loan to be reviewed annually and renewed once in two years.
� TL not more than 5years excluding moratorium not exceeding 6months
11. Documentation
As per simplified SME documentation
12. Special � A simplified appraisal model (enclosed) has been developed to
36
features
standardise the appraisal process. � A special application form has been designed to capture all the
required information at one instance.
*Override: Units that are not able to score 60% or more marks in the scoring model will
not qualify for consideration under SME Smart Score Scheme. However, such loans not approved under SME Smart Score Scheme can still be considered by the Branches under the normal credit dispensation based on specific considerations.
Product Highlights:
This product is designed to avoid delays in credit delivery due to cumbersome assessment processes. A simple scoring model has been designed for which all the data required has to be furnished at one go by way of an application form which has also been specially designed for this product. Units which score a minimum of 60% are eligible for this product. This product can be given to units in C&I, SSI and SBF segments for credit requirements between Rs.5 lacs to Rs.50 lacs( Rs.25lacs for T&S) based on the projected turnover and / or project cost. The loan quantum should be a minimum of 20% of turnover and/or, 67% of project cost. If a proposal does not fit into this model, it can also be considered on usual Bank's terms on merits.
Marketing tips:
� This product is especially useful in Trade advances and small industries � All SMEs especially those which are individually managed proprietary
concerns/ partnerships / private limited companies are the target group.
FAQs
� How to arrive at the quantum of loan for units engaged in trade for working capital purposes? While SSI units qualify for a limit of 20% of their projected annual turnover (Nayak Committee norms), the trading units may be extended a working capital limit of 15 % of their projected annual turnover subject to a maximum of 25% increase in the projections over the turnover of the previous year.
SME SMART SCORE
LOAN APPLICATION FORM
The SME Smart Score is available ONLY if the answers to all the following questions are
37
“Yes”
1. Whether the chief promoter / Chief executive is between 18 and 65 years of age?
2. Whether the promoters are not defaulters to the banks/ financial institutions.
3. Whether all the clearances including but not limited to environmental clearance for the project has been obtained / satisfactory evidence of their being made available will be provided?
4. Whether the promoters being to the area of operation of the branch and have satisfactory references?
38
SME SMART SCORE
LOAN APPLICATION FORM
Please fill up this form only if the answers to all the following questions are “YES”
1. Whether the chief promoter / Chief executive is between 18 and 65 years of age 2. Whether the promoters are not defaulters to the banks/ financial institutions 3. Whether all clearances for the project have been obtained 4. Whether the promoters belong to the area of operation of the branch and have
satisfactory references?
General :
Name of the Company / Firm
Address (Off) :(If factory and office are having different Addresses, Give the Address Nearest to the branch First)
Plot/Building/Plat Name and Number
Street Name
Post Office
City
Telephone No (with Pincode)
Fax
Address(Factory):
Plot/Building/Plat Name and Number
Street Name
Post Office
City
Telephone No (with Pincode)
Fax
Loan Applied for
Purpose of the Loan
When and how the loan will be repaid?
39
PERSONAL DETAILS OF THE CHIEF PROMOTER / CHIEF EXECUTIVE
Name of the Chief / Promoter / Chief Executive
Residential Address
Plot/Building/Flat Name and Number
Street Name
Post Office
Post Office
Pin code
Telephone No
Fax
What is your Date of Birth ?
Let us know about your family
Are you married Yes / No
What is your spouse’s occupation?
How many children do you have?
Your house Owned Rented
What is your academic qualification? Is it related to your line of trade?
Are you assessed for Income-Tax? YES/NO If yes, PAN No.
Your Account Number/ How long are you having
deposit account with SBI? What would be the
minimum balance in the account?
Do you have a life insurance policy?
I certify that all information furnished by me / us is true, correct and complete. I have no borrowing arrangement for the company / firm with any bank except as indicated in the application form. There are no over dues / statutory dues by me or the firm / company. No legal action has been taken against me / firm / company. I shall furnish all other information that may be required by Bank in connection with my application. The Information may also be exchanged by you with any agency you may deem fit you, your representative of any other agencies as authorized by you may at any time inspect / verify my / our assets, books of account etc. in our factory business premise as given above. You may take appropriate safeguards / action for recovery of bank’s dues including publication of defaulter’s name in website/ submission to RBI. I further agree that my loan shall be governed by the rules of
40
State Bank of India as may be in force from time to time.
Place Signature of Chief Promoter / Chief Executive
Date
BUSINESS DETAILS
Year of commencement of business
State the profit / loss for the last 3 financial years
YEAR I YEAR II YEAR III
State the sales turnover for the last 3 financial years :
YEAR I YEAR II YEAR III
Tell about your factory
premises
Owned Rented Leased for over 5 years
Tell about your factory premises
How do you plan to produce it?
Does the product require special know-how? If so, are you in possession of the know-how?
Whether your line of activity falls under priority sector?
41
What are raw materials required? How do you plan to produce them? Are they available on credit? If so what are the terms of credit? How do you plan to ensure the quality of your product? Any special steps being taken?
What about utilities like water, power etc. Please describe the requirements and how are they met? Whether you need skilled labour? Please describe your plans for sourcing and employing skilled labour? Any special reason to locate your business at the present location? Is there any advantage in procuring the raw materials locally? Is the local market enough to sell the finished product of your firm? Any other advantage? Manufacturing process in brief
What the level of competition for the product? How do you plan to meet the competition?
Give the total outside liabilities for the last 3 years and your tangible networth.
42
PARAMETER YEAR I YEAR II YEAR III
Total outside liabilities
Tangible networth
(including loans from friends and
relatives)
TOL / TNW
What is the quality of your receivables?
How many months’ sales do they represent?
Can you give an age profile of your receivables?
Age Amount Percentage to total
Less than 1 months old
1 to 2 months old
2 to 3 months old
More than 3 months old
Total percentage 100%
What is the quality of your finished goods inventory?
Are they sold against order as and when produced?
Are they kept in stock for long?
How many months’ sales do they represent?
What will be the time period between procurement of raw materials to realization of sale proceeds?
43
Can you cut short the cycle without increasing your liability?
Give the details of cost and the means of finance for your project
Item Why do you need to purchase the item?
What is the basis of your cost
Cost of the item
How do you proposed to acquire/ procure the item
Land
Building
Machinery
Others
Total cost
What are the means of finance?
Means Amount Give details*
From own sources
Bank loan
Friends and relatives
Others
Total
*Bank should be satisfied about your ability to bring in the margin.
Has the project been vetted by the consultancy cell of the Bank or consultants of
repute? Give details
44
___________________________________________________________________
___________________________________________________________________
What is the repayment period you are looking for the term loan? What will be the
annual
cash accruals? What will be your liability towards payment of installments and interest on term loan in a year? Whether the cash accruals will be sufficient to take care of the repayment liability?
Anything else you would like to tell about your business
What is the collateral you would be able to offer? GIVE DETAILS
Item Value Basis
TOTAL
Please tell us about your further plans : What is the level of sales you are projecting?
What is the level of receivables you are expecting in terms of months’ of sale? What is the level of finished goods inventory you are expecting to maintain in terms of months’ of sale?
45
I certify that all information furnished by me / us is true, correct and complete. I have
no borrowing arrangement for the company / firm with any bank except as indicated
in the application form. There are no overdues / dues owed by me or the
firm/company. No legal action has been taken against me / us firm / company. I shall
furnish all other information that may be required by Bank in connection with my
application. The Information may also be exchanged by you with any agency you
deem fit. You, your representatives of any other agencies as authorized by you may
at any time inspect / verify my fixed assets, books of account etc. in our factory
/business premises as given above. You may take appropriate safeguards/action for
recovery of bank’s dues including publication of defaulters’ name in web
site/submission to RBI. I further agree that my loan shall be governed by the rules of
State Bank of India as may be in force from time to time.
Place : _______________ For and on behalf of the company
Date : _______________ Signature of Chief Promoter / Chief
ANNEXURE-II
LOAN APPRAISAL
46
ASST GENERAL MANAGER / CHIEF MANAGER: - FOR SANCTION APPRAISAL MEMORANDUM UNDER SME SMART SCORE Branch: SEGMENT : C&I / SSI / SBF (Micro/Small Enterprises) The proposal conforms to the extant instructions of the scheme. The scores awarded under credit scoring criteria are as under: SEGMENT MIN SCORE MARKS SCORED
Personal Details 15/30 Business Details (or) Green Field ventures
25/50
Collateral Conditions 10/20
Total Score 50/100 (To be eligible under the scheme, the unit should get a minimum score of 60% with a minimum of 50% under each sub-head) 1. PROPOSAL FOR I. Sanction of a. b. II. Approval for c. d. III. Confirmation of 2. Details of Credit limits Rs.in lakhs Facility Existing Limits Facility Proposed Limits CC(Hyp)
CC(Hyp)
SME Credit Plus SME Credit Plus
TL TL LC/BG (As sub limit of CC(Hyp))
LC/BG (As sub limit of CC(Hyp))
Total Limits Total Limits 3.Name of the Borrower
4.Name of Proprietor /Partners/Directors
5.Address Factory Office
6.Constitution
Proprietorship/Partnership/ Private Limited Company
47
7.Line of activity
8.Year of Incorporation
9.Banking with SBI since
10.IRAC Status
11.Details of Associate Concerns/Family Concerns and their Bankers Any NPA’s among associates?
12.Date of last sanction (not applicable for fresh exposures)
13. Position of the account as on Rs in lacs Facility Limit MV AV DP O/S Irregularity,
if any (Not applicable for new units) 14. Brief background & History :-( to be brief and in bullet points only) (Comments on management, products, tie-up arrangement if any, quality approvals/certifications etc) 15. Performance and financial indicators: Rs in lacs 31 March
YR.BEFORE LAST Audited
LAST YEAR Audited
CURRENT YEAR Estimates
FOLLOWING YEAR Projections
Domestic Sales
Export Sales
Net Sales
Profit after tax
PAT/NS (%)
Cash Accrual
48
Paid up capital
TNW
TOL/TNW
Current Ratio
Comments on Financials ;( Brief bullet points only) 16. Term Loans Project Details
Project Cost Rs. Bank Loan Recommended Rs. (As per assessment in annexure-III)
Debt/Equity
17. Working Capital Requirement: Working capital limit of Rs.------ has been assessed for the year --- and Rs.----has
been
assessed for the year -----, as per the Projected balance sheet method/traditional
method as per the workings as on annexure-II.
(After satisfactory review of the limits assessed for the first year, additional limits for
the
subsequent year shall be released. However documents for the higher of the limits to
be
obtained at the initial stage itself.)
18. Comments on conduct of Account: (covering irregularities, non-compliance, LC devolvement, BG invocations, etc.): Comments on Summations vis-à-vis sales Period under review
Credit summations
Debit summations
Gross sales
Opening Sundry Debtors
49
Closing Sundry Debtors
Comments: 19. Whether (a) the name(s) of the Individual/Directors appear(s) in RBI’s list of defaulters/RBI’s list of willful defaulters & (b) the Individual/Directors name figures in ECGC’s caution list:
Particualrs Date Position
RBI Willful Defaulters list(Non-Suit filed) Rs.25lacs and above
CIBIL List(Suit filed) Rs.25 lacs and above
ECGC specific approval list
20. Comments on I&A and other audit reports, which have an impact on credit risk on the unit:, if any: Name of Report Date of report Serious irregularities/
Adverse features remaining unattended
Comments in last I&A report & its present status
Company's audited Balance Sheet (Qualifications)
21. If the unit has scored less than 60% marks in any of the individual parameters in SME Smart Score, please comment critically on those parameters (even though the aggregate score may be more than 60%) 22. Recommendations; Recommended for sanction of Working Capital limit of Rs. Term loan of Rs. --------------------------- Total limit Rs.
50
On the terms and conditions as set out in Annexure-VI
Signature & Name Appraised and Assessed by
Sanctioned by
Designation & Date
Enclosure: Applicant’s application.& others Statement of Credit Score arrived as Annexure -I.
Controlled by Signature Name Designation Date
51
CREDIT SCORING CRITERIA
Name of the Company/ Firm :
Name of the Chief Promoter / Chief Executive : (In case of partnership concerns
where the partners are having equal stake the personal profile of the active
promoters as declded by the concern could be taken)
1. Personal Details :
Sr. No.
Parameters Maximum Marks
Marks Scored
Criteria Details of Documents
Verified
1. Age 5
4
3
1
18 to 24
25 to 49
50 to 59
60 to 65
2. No. of children 2
0
Up to 3
>3
3. Owning a house 5
0
Own
Not owning a house
4. Academic qualification 4
3
1
Professional
Graduate / P.G. Matric
Below Matric
5. Experience in the line of trade
5
3
2
More than 5 years
2 to 5 years
less than 2 years
6. Spouse details 1
0
Employed
Homemaker
7. Assessed for income-tax 2
0
Assessed
Not assessed
8. Deposit account with SBI
(minimum deposit should be Rs. 10,000 in the period under review)
5
3
2
3 years and above
6 months to < 3 years
< 6 months
9. Have life insurance policy 1
0
Yes
No
Marks scored 30
52
Minimum score should be 15 marks
Business Score :
2 A. For existing units which have not so far availed any loan from the Bank. If takeover from another Bank, takeover norms, prescribed by the Bank are to be first evaluated and fulfilled.
Sr. No.
Parameters Maximum Marks
Marks Scored
Criteria Details of Documents
Verified 1. Years in business 5 5
3 2
5 years & over 3 years to < 5 years 1 years to <3 years
2. Continuous net profits (before tax)
5 5 3 2
Last 3 years Last 2 years Last year
3. Sales show a rising trend 5 5 3
Last 3 years Last 2 years
4. Factory premises 3 3 0
Owned or over 5 year lease Rented
5. Know-how 2 0 2
Specialized know-how Common knowledge
6. Line of activity 1 1 0
Priority Sector Non priority Sector
7. Competition 4 4 3 2
Low Medium High
8. TOL/TNW (Quasi equity to be added to TNW and reduced from TOL)
5 5 3 2 1
2 & below >2 but upto 3 >3 but upto 4 >4 but <5
9a. Quality of receivables 5 5 3 2
Up to 3 months of sales >3 but up to 4 months of sales >4 months of sales
9b. Quality of finished goods inventory
5 5 3 2
Upto 1 month of sales >1 upto 2 months of sales >2 months of sales.
10. Repayment period (Not applicable for only working capital loans)
5 5 3 2
Upto 3 years >3 to 5 years > 5 years
11. Gross DSCR (not 5 6 > 2
53
applicable for only working capital loans)
3 2
Between 1.5 tand 2 < 1.5
Marks Scored 50/40 Items 10 & 11 are not applicable for working capital loans alone. In that case the score should be normalized for 50 (marks scored / 40) x50) Minimum Score should be 25.
2B. For Greenfield Ventures :
Sr. No.
Parameters Maximum Marks
Marks Scored
Criteria Details of Documents
Verified 1. Branch is in the know of
business ( includes cases where the Project is appraised by consultants of repute)
10 0
Yes No
2. Manufacturing / Servicing / trading / process is well known to applicant to produce / service / trade the required quality of the product
5 0
Yes No
3. Location advantage 2 0
Yes No.
4. Availability of utilities including labour
2 0
Easy Ok
5. Firm’s capacity to sell the product at the price and quantity.
5 0
Good OK
6. Line of activity 1 0
Priority Sector Non Priority Sector
7. TOL / TNW (Quasi equity is to be added to TNW and reduced from TOL)
5 3 2 1
1 and below >1 upto 2 >2 up to 3 > 3
8a. Quality of receivables as per projections
5 3 2
Up to 3 months of sales More than 3 up to 4 months More than 4 months
8b. Quality of finished goods inventory as per projections
5 3 2
Up to 1 month of sales >1 but upto 2 months of sales > 2 months of sales
10. DSCR (not applicable for only working capital loans)
5 3
>2 1.5 to 2
54
2 <1.5 Marks Scored 50 /
40
Minimum Marks : 25 out of 50.
3. Collateral Conditions :
Sr. No.
Parameters Maximum Marks
Marks Scored
Criteria Details of Documents
Verified
1. Equitable Mortgage of Property : Value of property
(If TDR or cash equivalent is offered as security multiply cash equivalent by 2 and add to the collateral value) / loan amount (%)
15
12
10
5
0
75% and over
50% to <75%
25% to <50%
<25%
Nil
2. Residential Property as part of 1
5
0
Yes
No
Marks Scored 20
Minimum Marks are 10 (except in cases where Collateral should not be asked as per Bank’s norms, the minimum mark will be Nil)
55
Annexure-II Name of the Borrower: ASSESSMENT OF WORKING CAPITAL I. For SSI, SBF and Retail traders:
Rs.in lakhs.
1.Projected Turnover Method (Nayak Committee Method)
Estimated
Ist year
Projected
2nd Year
a. Estimated Sales for the Current year
b. Working capital required (25% of ‘a’)
Eligible Bank Finance (80% of ‘b’)
Bank finance Required (A)
2.Assessment as per Traditional Method
Estimated Purchases in the current Year
Estimated Average Raw Material Holding at any time
(Calculated at cost of Purchases)
Estimated Average holding of Stock in process and Finished goods at any one time
(calculated at cost of Production)
Estimated Average Receivable outstanding at any one time
Total Requirement
Less estimated average credit enjoyed on purchases
Less Other Sources like unsecured loans, plough back of profits etc
Bank Finance Required (B)
Working Capital Assessed/recommended
A or B above which ever is higher i.e
II.For Self Employed and Professionals 50% of Gross annual income as declared in their Income Tax return.
III.Comments on Production aspects: (covering location advantages, availability of raw material and other utilities like water, power, fuel, labour etc. IV.Brief Comments on Marketing Aspects:
56
V. i) Assessment of EPC limits: Rs.in lakhs
ii) Assessment of EBD limits:
Rs.in lakhs Sr. No Particulars Estimated
Ist year Projected 2nd year
1 Estimated Exports
2 Exports on Usance bill basis 3 Usance period
4 Lead Time 5 No. of cycles in a year
6 Eligible EBD Facility 7 Limit requested by the unit 8 Limit recommended
iii) Brief Comments on the above limits: VI. Assessment of Non fund based limits:
i)Assessment of LC limits:
Rs.in lakhs Annual Raw Material purchases
Monthly Raw Material purchases Monthly Raw Material purchases through LC’s @ % (A)
Average Usance Period (B) Lead Time and transit period (C) Total of ‘B’ and ‘C’ (D) LC limits required (= A X D) Recommended LC Limits
Sr. No Particulars Estimated Ist year
Projected 2nd year
1 Estimated Exports 2 Exports - at cost 3 Lead time and usance period
(includes order period / manufacturing period etc.)
4 No. Of Cycles in a year 5 EPC requirement per cycle 6 Less:- Margin on EPC – % 7 Eligible Limit 8 EPC limit recommended
57
Assessment of BG limits: Rs.in lakhs
Outstanding BGs as on Add: BG’s required during the next 12 months, as under 1.Earnest Money deposit 2.Security Deposit 3.Advance Payment BG 4.Retention Money Deposit/Maintenance Guarantee 5. Guarantees on account of sales tax, commercial tax and excise duty payments
Less: Estimated maturity/cancellation of BG’s during the period .
Requirements of BG’s Recommended BG limit
Brief comments on requirements of above limits:
58
Annexure-III Name of the Borrower: Assessment of Term Loan: 1.Project Details
Rs.in lakhs. Project cost
Cost Margin (%) Margin amount Required Bank Finance
Land &Buildings Plant& Machinery WC margin Contingencies
Total project cost
Means of finance
Own funds Borrowings from friends and relatives
Bank finance
others
Total means of finance
Debt /Equity :
3. Details of capital expenditure i.e land and factory building as well as machinery proposed to purchase: 4. Remarks on cost of project & means of finance (in brief) 5. Term Loan Assessment: Rs.in lakhs Years 1
(Act) 2 (E)
3 (E)
4 (E)
5 (E)
6 (E)
Net Profit Depreciation Cash Accruals Repayment obligations (including Interest)
DSCR Average DSCR 6. Project implementation schedule: 7. Comments on Commercial viability:
59
Annexure-III-A (for SRTO’s)
Name of the Borrower:
Term Loan assessment for Transport Operators (SRTO) Cost of Vehicle/s Rs. Borrower’s Margin ( %) Rs. Term loan recommended Rs. Assessment:
Earnings
1 Total No. of Kilometers to be run per day (estimated)/ No. of trips per day
2 Earnings per Km / earning per trip
3 No. of working days in a month
4 Total monthly earnings 1 x 2 x 3 …..A
Expenses
5 Cost of Fuel per litre
6 Quantity of fuel required per month
7 Cost of fuel per month
8 Monthly Wages / batta for driver / cleaner etc
9 Maintenance
10 Repair
11 Insurance (annual premium / 12)
12 MV Tax (annual tax /12)
13 Interest on borrowings
14 Sustenance
15 Other expenses
Total Monthly Expenses (5 to 15)….B
16 Monthly surplus …. A - B
17 Monthly TL repayment
18 DSCR 16/17
Brief details of above workings:
60
Annexure-IV Name of the Borrower: TERMS AND CONDITIONS 1. Facility
Limit
2. Security
Primary WC: TL:
Collateral
Personal Guarantee (Indicate Net worth of Guarantors with date of compilation of opinion reports)
3. Interest (Linked to SBAR)
CC(HYP): TL:
4. Margin(%) Stocks: Receivables: Cover Period: BG/LC (cash Margins):
Term loan:
4. Repayment CC(HYP):- Repayable on demand.
TL:
5. Validity of Sanction,
Review/Renewal
Sanction valid for two years. A review shall be made after 12 months.
6. Inspection Quarterly
7. Stock Statement To be submitted monthly.
7. Insurance
8. Processing fee
9. EM Charges
10. Commitment Charges CC(HYP):-
Term Loan:-
11. Penal Interest
12. Documents As per SME Documentation
13. Other Stipulations, if any.
61
FORMAT FOR ANNUAL REVIEW /RENEWAL OF LOANS SANCTIONED UNDER SME SMART SCORE PROPOSAL FOR REVIEW OF WC AND TERM LOAN SANCTIONED UNDER ‘SME SMART SCORE' SCHEME.
1.Name of the unit 2 Constitution Proprietorship/Partnership/Private limited Company
3.Name of the Proprietor/partners/ /directors
4. Business Address Phone/Cell No.
5.Nature of activity 6. a).Date of Last Sanction/review b) Sanction is Valid up to
7. IRAC Position as on 8.Present Position of Accounts as on date (Rs. In lakhs)
Facility Limit DP O/S Irregularity if any
CC
TL
LC/BG Comments on Conduct of above accounts:
9.Financial parameters (Rs. In lakhs)
Year Earlier
Estimated (previous year)
Actual achieved (previous year)
Estimated (Current year)
Net sales PBT Cash Accrual
TNW TOL/TNW C R
Comments( to be commented on actuals for deviations over estimates, if any)
62
9. Conduct of WC a/c (Rs. In lakhs)
Annual Turn over estimated Rs. Annual Credit Summations in the account Rs. Value of the account: Rs. (Interest/Exchange/commission Booked) Cross selling Products Booked : (Give the name of the products booked) Retail Business Booked Number of retail loans and amount booked for the promoters/employees :
10. Whether earlier sanction terms complied with.
11. Whether irregularities observed in I&A report rectified.? If not present status
12.Other Comments ( from Risk Angle) (On associates, conduct of accounts, Competition, quality of products, CIBIL report for individuals or corporate as applicable etc., and other relevant risks. Bullet points only)
14. Recommendations The Conduct of WC loan and Term loan has been reviewed and found satisfactory. The Credit Score for renewal of limits is as per annexure –I, is satisfactory. 1.Recommended for continuation of Working Capital limit of Rs. 2. Recommended for release of additional working capital limit of Rs. as per the original sanction on (give date) for the projected year----- On the above terms and conditions as already set out in the original sanction dated— Signature Name Designation
Appraised by Approved by
63
Date
64
Name of the Borrower:
Credit Scoring Model for Renewal proposals Sr. No.
Parameters Maximum marks
Marks Scored
Criteria Marks
1 Actual sales/projected sales 10 90% & above 70% to < 90% 50% to < 70% Below 50%
10 8 5 2
2 PBT/NS (%) 10 Increasing Flat Decreasing
10 5 1
3 Change in TOL/TNW during the year
5 Decreasing and upto 3 Decreasing but above 3 Increasing but upto 3 Increasing but above 3
5
3
3
0 4 Overall conduct of the
account and working of the unit
15 Excellent Good OK
15 10 5
5 Credit summations in the account during the preceding 12 months
10 90% & above 70 – 89% 50 – 69% < 50% (% of sales)
10 7 5
NIL MARKS SCORED 50
Minimum Marks should be 30/50
Veto Power if the account is unsatisfactorily conducted i) cheques are frequently returned ii) debit balance (outstanding) is over the drawing power for over 160 days in
the year iii) non-compliance of critical terms and conditions
(frequent devolvement of LCs and invocation of guarantees/non receipt of stock statements etc. have not been mentioned as they would be reflected in ii)
Appraised by Approved by Name Date
RICE MILLS PLUS
65
1. Target Group
: Rice Mills with proven track record as well as new units set up by
our existing borrowers
2. Eligibility
: a) Profit making existing units with CRA rating of SB4 and
above as per the simplified CRA system for Rice Mills
b) Take-over of units conforming to takeover norms is also
permitted
c) In the case of new units set up by our existing borrowers,
the regular CRA model for SSI / C&I units has to used and
should be at least SB3 rated to be eligible for finance
under Rice Mills Plus. Also, 50% of the partners should
be our existing borrowers and management control
should vest with them.
3. Purpose
: a) Acquisition of machinery/factory building for
modernisation
b) Working capital needs
4. Type of facilities
: Term Loan, Cash Credit, outward bill limit, LCs , BGs,
SME Credit Plus
5. Quantum of Finance
: No upper Ceiling. Nayak Committee norms are applicable:
minimum of 20% of projected annual turnover. A higher limit can
be considered selectively on projected balance sheet method.
Peak and non peak limits can be fixed depending on actual need.
Separate limits for other activities:-
Wherever the borrowers are engaged in other activities,
separate limits may be considered based on viability and other
aspects of assessment and appraisal.
6. Margin
:
Term Loan – 15-25%
Working Capital –
66
Stocks :-
Paddy &Rice - 15%-20%
Brokens - 20%
Bran - 30%
Gunny bags - 40%
Book debts-
40%(cover period – max. 60 days)
Margin for book debts can be lowered upto 25% where
adequate collateral is available.
7. Rate of Interest
: CRA Rating (
NEW)
Interest rates
Collateral
coverage
= >75%
Collateral
coverage
> 50% but <75%
SB1& 2
2.00% below SBAR
i.e. present effective
rate of 10.25% p.a.
1.50% below SBAR
i.e present effective
rate of 10.75% p.a.
SB 3,4 & 5
1.50% below SBAR
i.e present effective
rate of 10.75% p.a.
1.00% below SBAR
i.e present effective
rate of 11.25% p.a.
SB 6 &7
1.00% below SBAR
i.e present effective
rate of 11.25% p.a.
0.50% below SBAR
i.e present effective
rate of 11.75% p.a.
SB 8 & 9
At SBAR i.e present
effective rate of
12.25% p.a.
0.50% above SBAR
i.e present effective
rate of 12.75% p.a.
For Term Loans
67
SBTL 1&2
1.50% below SBAR
i.e present effective
rate of 10.75% p.a.
1.00% below SBAR
i.e present effective
rate of 11.25% p.a.
SBTL 3,4 & 5
1.00% below SBAR
i.e present effective
rate of 11.25% p.a.
0.50% below SBAR
i.e present effective
rate of 11.75% p.a.
SBTL 6& 7
0.50% below SBAR
i.e present effective
rate of 11.75% p.a.
At SBAR i.e present
effective rate of
12.25% p.a.
SBTL 8 &9
0.50% above SBAR
i.e present effective
rate of 12.75% p.a.
1.00% above SBAR
i.e present effective
rate of 13.25% p.a.
No further improvement in pricing under the scheme will be
allowed by the circle functionaries within the discretionary
powers vested with them.
8. Security:
- Primary
- Collateral
: Hypothecation/pledge of assets created out of Bank finance
a. For loans upto Rs.5lacs-NIL.
b. For Loans over Rs. 5 lacs:
i. Units have credit rating SB-7 and above:
Equitable mortgage of property / belonging to borrower
/guarantor valued not less than 50% of the loan amount.
ii. Units having credit rating of SB-8 and SB-9 : Equitable
mortgage of property / tangible security belonging to
borrower /guarantor valued not less than 60% of
the loan amount.
9. Processing fees
Rs.115/- per 1 lac
Upfront fee for term loans 0.60% of the loan amount
Issuance of drafts/ BCs/ cheque collection – 50% of applicable
charges.
10. Repayment
: TL – 5 to 7 years excluding the gestation period of maximum 12
months
11. Documentation : As applicable to SME units
68
Product Highlights:
So far, Rice Mills have been extended credit only on very stringent terms and even SB1 & SB2 rated companies could not be financed adequately due to the stiff terms of assessment. Keeping this constraint in view, this product has been introduced in the SSI segment with a simplified credit rating model which includes weightage for achievement for projected sales and loyalty to the Bank factor. A specially designed appraisal format has been designed for the product. This product can be extended at all branches handling CAAs and also those identified for the purpose by the Circle Management Committee. As regards assessment, for limits upto Rs.5 crores, Nayak Committee norms for working capital have to be adopted. New units can also be financed and the regular CRA model applicable to SSI/C&I units has to used for arriving at the CRA rating.
Marketing Tips:
• Simplified assessment method for arriving at WC & TL components.
• SME Credit Plus can be granted which is repayable in 6 months.
• Non fund based facilities can be extended especially for exporters.
• Outward Bill limit upto 60 days cover can be considered in specific cases.
• A traditional banking product with a new look and very attractive terms of
finance.
FAQS
� Can the loans under this scheme be handled at rural branches?
Yes, provided the Circle Management Committee authorizes
the branch for handling this business.
� What is the rating pattern under the simplified model designed for this product?
The rating model for this product is as under:-
69
Circular Reference:
Sl No Circular No e-Circular Reference No
1 SME/Mfg./RKG/Cir-12 / 2009-2010 08th
June,2009
152/2009 - 10
2 SME/RKG/ Cir-33/2008-09 dated
October 22, 2008
Credit rating score Rating
Over 90% SB1
Between 75 to 90 % SB2
Between 60 to 75 % SB3
Between 50 to 60 % SB4
RICE MILLS PLUS - CREDIT RATING SYSTEM
S.No. Parameters Score
1. Current Ratio >=1.15
>=1.13 <1.15
>=1.10 <1.13
>=1.05 <1.10
<1.05
15
12
8
5
0
2. TOL/TNW Ratio <=2.50
>=2.50 <3.50
>=3.50 <5.00
>=5.00 <6.00
>6.01
10
8
6
4
2
3. Gross average DSCR for all loans
inclusive of the proposed term loan
>=2
<2.00 >=1.75
10
7
70
<1.75 >=1.50
<1.50
5
2
4. Interest and instalment obligation of cash
credit and term loan(s) � Timely repayment on due date
� Delayed payment upto 30 days
� Over 30 days
10
5
0
5. Total sales : Inventory + sundry debtors >= 4 times
>=3times <4 times
>=2 times <3 times
<2 times
10
8
4
2
6. Submission of stock statements, balance
sheets, renewal data � Timely submission
� One month delay
� Irregular in submission
5
3
1
7. Achievement of projected sales >=85%
< 85% >=50%
<50% >=25%
<25%
5
4
3
0
8. Supported by tangible collateral security
including 2nd
charge on fixed assets
Security coverage to total loan
>=100%
>=50% <100%
>=25% <50%
<=25%
10
8
4
2
9. Operational experience in cash credit � Liability not exceeding DP / Limit
� Liability exceeded limit Occasionally. Excess drawal adjusted in time.
� Liability exceeded frequently and adjusted with some delay.
10
5
3
10. Compliance with terms and conditions of
sanction � Complied with promptly
� Complied with delay
� Not complied with
5
3
0
71
11. Age of relationship with the Bank
(Banking with us since….)
Above 5 years
>3 years <5 years
> 1year <3 years
5
4
2
12. Age of the firm / Company# Above 5 years
>3 years <5 years
>1 year <3 years
5
4
2
Remarks a) Gross average DSCR for all loans (Sr. No. 3) will not be applicable in case the unit is
not
seeking term assistance. In such cases, the total score need to be normalized to 100.
b) The higher age of the firm / company will reduce the chances of default.
Consistence downfall in performance inclusive of profitability parameters should fetch a
firm
/ company a score of 2 irrespective of the age of the firm/company.
72
Annexure-II Commercial Advances IRAC
SSI Segment : Rice Mills Credit Rating
Unit : Date of last renewal
1. Proposal for :
(Please tick)
Renewal of working capital limits at the existing level
Renewal of working capital limits with enhancement
Sanction of working Capital limits – New
Sanctioning Authority (CCC-I / CCC-II NWCC / SECC / AGM / CM / BM)
2. Total indebtedness :
(Rs. Lakhs)
Nature of Facility Existing Proposed
Fund Based
Cash Credit (MT)
Cash Credit (Hypothecation)
Cash Credit (Outward Bills – Clean)
Medium Term Loan
Total (A)
Non Fund Based
Letters of credit
Bank Guarantees
Total (B)
Grand Total (A+B)
3. Borrower
a) Name :
73
b) Factory at :
c) Constitution : Partnership
d) Date of Partnership deed :
e) Name & Worth of Partners :
S.No. Name Worth in Rs. Lakhs
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
f) Products manufactured / processed :
g) Date of commencement of :
Commercial production
h) Dealing with SBI since :
i) Whether the firm has power to borrow : Yes / No.
j) Names of authorized signatories
(If applicant is other than a partnership, please alter the columns suitably)
4. Brief History :
5. Production facilities : As per Annexure – I
6. Key Financial Indicators :
74
Actuals Estimates Projections
31.3. 31.3 31.3. 31.3
Sales
Rice - levy (FCI)
Quantity (Quintals)
Value
Rice - levy (APSCSC)
Quantity (Quintals)
Value
Rice - Non Levy
Quantity (Quintals)
Value
Brokens
Quantity (Quintals)
Value
Bran
Quantity (Quintals)
Value
Husk
PURCHASES – Quality – wise
Quantity (Quintals)
Value
Gross Profit
Net Profit
Tangible Net Worth
Current Assets
75
Current Liabilities
Net Working Capital
Current Ratio
TOL / TNW
Current Year Sales from 1st April to 30
th
September
7. Comments on the financial position / indicators :
Sales
Net Profit
Annex - I Production facilities :
Owned Leased
Capacity of Rice Mills (Tons per hours)
Number of shifts per day
Total No. of working days
Total Annual Capacity
For the Leased Capacities :
Name of the Owner :
Date of Lease deed :
Valid up to :
76
Whether the lease rights are : Yes / No.
Assignable
Clauses detrimental to the : Bank’s Interest if any
II. Storage Capacity :
Milling Hall :
Open Yard :
Godown :
Owned :
Rented :
Total Storage capacity :
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For Rented Godowns
Whether rent letter obtained : Yes / No.
Assessed Quantity of
III. Production (Projected for the current year)
Levy Non Levy Total
Paddy proposed to be milled (Quintals)
Production (in Quintals)
Rice
Brokens
Bran
Husk
Total
IV. Sales (Projected for the Current Year)
Levy Non Levy Total
Rice
Brokens
Bran
Husk
Total
Monthly Turnover (in Rs. Lacs) for the last twelve monthas)
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Month 1 2 3 4 5 6 7 8 9 10 11 12
Turnover
V. Utilities :
Required Available
Power
Transco
Generator
Water
Labour
VI. Licenses / Statutory Dues / Litigation
SSI Registration Number
Position regarding Statutory dues Assessed upto Assessed Value
Income Tax
Sales Tax
Any Pending suits against the unit by the
Government Departments / Corporations
Yes / No.
If “Yes”, furnish the particulars on a separate sheet)
Whether all the required licenses are obtained
and kept on Record
Yes / No.
If “Yes”, furnish the particulars on a separate sheet)
Associate
Concerns if any
and the position of
accounts
I II III
Unit’s Name
Date of Sanction
Limit (Rs. Lakhs)
79
D.P. (Rs. Lakhs)
O.S. (Rs. Lakhs)
IRAC Status
VII. Commercial Data
Before Last Year Last Year Current Year (Proj.)
Levy Quota allotted* (Quintals)
Levy sales (Quintals)
Levy Sales (Value)
Non-Levy sales (including brokens,
bran and husk etc.) value
Maximum Drawings at any one time
Interest Income*
Other Income
* Expected, If order is not yet received
(Enclose copy of the present order issue by the competent authority. If the present one is not yet
received, enclose previous year’s order)
Overall Risk Level : Score out of 100
Credit Rating Awarded :
Asst. / Deputy Manager (Appraisor) Branch / Chief Manager (Assessor)
TRADERS EASY LOAN (TEL)
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1. Target Group
: 1. Wholesale and retail traders in agricultural or industrial
commodities
2. Professionals and self – employed
3. Small business enterprises
4. Commission agents engaged in purchase and sale of food
grains and other commodities
5. Cotton ginning mills that purchase cotton and sell it after
ginning.
6. Oil Mills
7. Rice Mills (Rs.5 lacs to Rs.500lacs)
Cold storage units upto Rs.1 crore.
2 Eligibility
: Existing customers with a satisfactory track record.
New connections including take - over can be considered subject to
take- over norms.
3 Purpose
: The loan can be considered for acquiring fixed assets fro the business
and/or build up of inventory /current assets.
4 Type of facilities
: Cash Credit / Demand Loan/ Term Loan
Working capital finance can be availed either as CC or DL or partly CC
and partly DL
5 Quantum of Finance
: Rs.0.25 lac to Rs.500 lacs.
For traders and wholesalers, for professionals and self employed
The credit needs will be assessed for the purpose stated and the loan
component shall not exceed 20% of the projected annual turnover or
75% of the capital costs to be incurred for business or 65% of
realizable value of property whichever is less.
In the case of rice mills, the quantum of finance can be assessed based
on pucca records of the unit and can be fixed anything between 20%
to 40% of the projected annual turnover.
For existing borrowers who have been sanctioned other limits the
Loan can be sanctioned subject to :-
i) the existing loan accounts have conducted satisfactorily
for the last three years;
ii) the eligible amount ie., the outstandings in the existing
accounts and the proposed loan should be within 65% of
realizable value of the property mortgaged to the Bank
without resorting to revaluation of the property.
6 Margin : 35% of the realizable value of the property to be mortgaged or 25% of
the costs to be incurred for the business if TEL is availed for capital
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expenditure
Rate of Interest
: CRA assessment is dispensed with for this product.
CC / DL – 0.25% below SBAR – Minimum of10.50%
Term Loan - 0.25% above SBAR - Minimum 11.00%
ZCC has been delegated with powers to reduce the interest rates by
0.50% based on value of collateral, value of connection and the level
of competition.
8 Security:
- Primary
- Collateral
: - Hypothecation of stocks and receivables
- EM of land and building or tangible security by way of
TDRs, NSCs, etc. Open land whether inside or outside the municipal
limits should not be accepted as collateral. In exceptional cases, on
business considerations, approval may be sought from SMEBU,
Corporate Centre for accepting open land as security.
9. Processing fees Working Capital limits (FB + NFB)
For loans upto Rs.2lacs – Rs.250/-
For loans above Rs.2lacs – Rs.250/- per lac or part thereof, -
Maximum Rs.10lacs
For Term Loans above Rs.2lacs
Upfront fee of 1% of the loan amount to be recovered
10 Repayment
Cash Credit - On demand
Demand Loan - 36 months
Term Loan - Upto a maximum of 60 months based on cash flows in
monthly / quarterly / half yearly installments
11 Documentation
: As applicable to working capital advances/ term loan for trade and
services sector
12 Special features
� CC limit is valid for two years, but subject to Annual
Review.
� At the time of renewal / annual review of the account, if the limits are assessed to be less than the existing limits, and the borrower is not in a position to repay the excess amount in 90 days, the excess amount would be carved out as a demand
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loan and may be allowed to be repaid within a maximum of 24 monthly installments. During this time, if on later renewal, the borrower is eligible for higher limits, the repayable amount and the repayment period would be reduced accordingly.
� Stock statements need to be furnished at the time of
sanction and at quarterly intervals, as at the end of
February, May, August and November thereafter.
� Stock statements waived for TL and DL
� Inspection should be at quarterly intervals
� In case the loan is by way of CC, the credit summations
should be at least 200% of the CC limit.
� TL/DL should be with monthly repayment schedule and
has to be reviewed annually.
Product Highlights:
This is a product which is very user friendly in as much as the process of assessment of the
limit and delivery has been simplified and the need for periodical stock statements
has been reduced to the minimum.
Marketing Tips.
This is suitable for a large number of traders in the medium range who are now unable to access
bank finance due to financial compliances which are not always prevalent in the particular trading
activity. The rate of interest is very competitive. The loan can be restored after 6 months in case the
conduct of the loan has been regular.
APPLICATION FORM FOR MORTGAGE LOAN (TRADERS EASY LOAN)
TRADE & SERVICES SECTOR
1. Name of the Unit :
2. Address along with :
Telephone No. / Fax No./
e-mail if any
3. Activity : Trading in ………………………..
Services : ………………………..
4. Date of Commencement
83
of business
5. Constitution : Proprietorship Partnership
(Please tick ( )) Corporate Any other
6. Details of Proprietor / Partners / Directors etc.
Name Age Qualification Means*
• Opinion Report on the Bank’s prescribed format should be prepared by branch officials.
7. Present credit facility enjoyed, if any :
Name of the Bank & Branch Facility* Limit Outstanding
• In case no credit facility enjoyed and only a current account is maintained please advise specifically.
8. Associate / Sister concerns, if any :
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Name of the Unit Name of Partners /
Proprietor
Banking with
9. Credit Facilities Required :
Fund Based :
Term Loan :
Non-fund based
Letter of Credit :
Bank Guarantee :
10. Details of Security Offered :
Primary :
Collateral :
(i) Immovable Property
Description of Property Name of the owner* Market Value
85
(ii) Liquid Securities :
Description Name of the
Owner*
Face Value When Acquired Present
Value
• If owner is other than the proprietor / partner of the firm (i.e. guarantor), details of the guarantor viz. Name, Age, Residential Address and Phone No. etc. should be given :
Name of the Guarantor &
Address
Age Qualification Means
11. Key Financial Parameters :
(for three years)
As on 31.3……. As on 31.3……. As on 31.3…….
(i) Sales
(ii) Net Profit
(iii) Depreciation
(iv) Cash Profit
(v) Tangible Net Worth
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I / We declare that the information given in the application form are true, correct
and complete and that they shall form the basis of any kind of facility State Bank
of India may decide to give under the SBI Trader’s Easy Loan Scheme. I / We
confirm that I/We are not defaulters of any Bank. I / We also confirm that I / We
have / had no insolvency proceedings against me/us nor have I / we ever been
adjudicated insolvent. I / We undertake to abide by the Rules and Regulations of
State Bank of India in respect of SBI Trader’s Easy Loan Scheme.
Signature of Borrower
Date :
Place :
List of Documents to be attached :
1. Copy of collateral security being offered.
2. Latest copy of income-tax return / Assessment order etc.
3. Statement of account from the existing banker for the last 6 months.
4. Copies of relevant license, documents pertaining to ownership / tenancy / lease agreement etc., in respect of premises where activity will be carried out.
87
Assessment format for Traders’ Easy Loan (TEL)
Readily realizable value of property offered as security: Rs. (A)
Maximum eligible amount under TEL (65% of A) Rs. (B)
Assessment for working capital assistance (to be released as CC limit)
Actual turnover in the previous financial year Rs. ( C )
Projected turnover for the current financial year Rs. (D)
(If the projected turnover is in excess of 125% of ( C), the same should be substantiated with proper
supporting factors that justify increase in turnover by over 25%).
Working capital to be provided as TEL=20% of projected turnover (D)Rs (E)
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In case of renewal:
Credit summation in the CC account for the past 12 months Rs. (F)
Eligible working capital limit based on credit summations in the Bank A/c
In previous year(in case of existing loan accounts) assuming 25% growth in
Turnover and minimum 50% sales being routed through Bank A/c.
(50% of F) Rs. (G)
Amount to be sanctioned is lower among (B) or (E) or (G)
If the borrower is already enjoying a higher limit than what is arrived at as above, the excess amount
may be segregated as a Demand Loan and repayment be set for the same over a 12 month period.
Assessment of TEL for acquisition of fixed assets:
Cost of equipments being purchased, including erection and
Other one-time costs that are being capitalized by the borrower. Rs. (H)
Eligible amount of Term Loan under TEL =75% of (H) Rs. (J)
Borrowers may avail Tel for both fixed assets and current assets and their need can be separately
assessed as above and the total exposure be restricted within (B) above.
Where there is already an existing loan on the property:
Sometimes borrowers are requesting for TEL against a property on which there is already a loan(e.g
housing loan). In such cases, the total indebtedness to the Bank{i.e. limits in case of CC and
outstandings in case of TLs should be restricted to (B) above} e.g. If there is a Housing Loan against a
property with current outstanding of (K), the value of Tel, ie (E) or (G)+(J)+(K) should not exceed the
maximum eligible amount(B).
SBI SME COLLATERAL- FREE LOANS" (SMECFL)
89
SPECIAL SCHEME FOR MICRO AND SMALL ENTERPRISES
UNDER GUARANTEE SCHEME OF CREDIT GUARANTEE FUND TRUST
(CGTMSE) UPTO RS. ONE CRORE
RATIONALE:
The liberalized SME-Collateral Free Loan Scheme with concessionary rates of interest under
CGTMSE cover was launched mainly due to the following reasons:
� To attract good borrowers, to create separate pool of accounts with specific product code
� To monitor progress under the scheme and the trend of default
� To ensure hassle free credit flow to Micro & Small Enterprises
� To achieve the benchmark 20% YoY growth in MSEs set by the Reserve Bank of India and
60% sub target for Micro Enterprises in Micro & Small (MSE) advances.
Name of the Scheme: "SBI SME COLLATERAL- FREE LOANS "(SMECFL)
Target Group
Micro & Small Enterprises as defined by
MSMED
Act 2006.
New and existing Micro and Small Enterprises
engaged in Manufacturing and service sector.
Note : In respect of Micro & Small enterprises in
service sector, Branches are advised to adhere to
the RBI’s guidelines on lending to Priority Sector
i.e. small road and water transport operators, small
business, professional and self employed persons
and all other service enterprises under the ambit of
Micro and Small Enterprises definition under
MSMED Act are covered but finance to
retails/wholesale trade, educational
institutions, training institutions and SHGs are
not eligible under the scheme.
Screening of
Eligibility
i. For Loans below ` 25 lacs
All bankable loans proposals below `25.00 lacs to
Micro and Small enterprises eligible under the
90
guarantee coverage scheme of CGTMSE under
the normal dispensation without insisting on
minimum score.
ii. For Loans between `25 lacs to `1.00 Crore
Units having CRA Rating of SB-10 and above as per the
applicable revised CRA rating norms as circulated by
Risk Management Department from time to time.
CGTMSE Guarantee
Coverage
Mandatory
Purpose
a. Working capital needs (FB+NFB).
b. Term loan for construction of Building, office,
acquisition of machines / equipments
including expansion and modernization of the
unit.
Assessment
a. Manufacturing Enterprises :
Working Capital (WC): As per Nayak Committee
norms (20% of the projected turnover),
Term Loan(TL) : 75% of project cost,
b. Service Enterprises:
Working Capital(WC) : 15% of the projected
turnover /Revenue.
Term Loan (TL) : 75% of project cost.
Quantum of finance
Total Exposure to the unit (FB+NFB) :
Upto Rs. 1.00 crore (All facilities WC, TL & NFB
facilities)
Type of Facility
Cash Credit, Letter of Credit, Bank Guarantee,
Term Loan.
91
Repayment
Working Capital(WC) : On Demand
Term Loan : Maximum Seven Years including
moratorium period not exceeding 6 months -1 year.
Submission of Stock
Statement
Up to Rs.25.00 lacs, once in a quarter.
Above Rs. 25.00 lacs once in a month.
Rate of Interest The undernoted concessionary rate of interest
will be applicable to loans sanctioned from 16th
Nov. to 15th Feb. 2011.
LIMITS
WC & TL for < 3 years
TL for 3 years. To 5 years
TL for > 5 years
Loans below
` 25.00 lacs
Loans `25.00 lacs & above
upto ` 1.00 crs
Unrated SB-1 to SB-5 SB-6 to SB-10
3.25% above
base rate i.e.
10.85% p.a.
3.00% above
base rate i.e.
10.60% p.a.
3.50% above
base rate i.e.
11.10% p.a.
3.75% above
base rate i.e.
11.35% p.a.
3.50% above
base rate
i.e.11.10%
p.a.
4.00% above
base rate
i.e.11.60%
p.a.
4.00% above
base rate
i.e.11.60%
3.75% above
base rate i.e.
11.35% p.a.
4.25% above
base rate i.e.
11.85% p.a.
Loan Processing and :
Service Charges
50 % of the normal rates. (Applicable on first time
sanction and annually on working capital review /
renewal)
92
Other Charges
Normal rates
CGTMSE Fee
Guarantee fee & Annual Service Fee as per the
rates prescribed by CGTMSE from time to time to be
recovered.
Inspection of the
Unit
Exposure upto Rs.25.00 lacs : Once in a quarter.
Exposure above Rs. 25.00 lacs : Monthly.
Security
Primary Security as defined by CGTMSE :
Definition of “Primary Security” in respect of
credit facility shall mean the Assets created out of
the credit facility so extended and / or Existing
Unencumbered assets which are directly
associated with the project or business for which
the
credit facility has been extended. (i.e. Plant,
Machinery, land & building pertaining to the project
or business).
Guarantee: As per the extant guidelines of
CGTMSE no third party guarantee should be
obtained if the account is to be covered under
CGTMSE Guarantee Scheme. However in case
the
constitution of the borrower is proprietary or
partnership, the personal guarantee of proprietor /
partner is not treated as third party guarantee.
Personal guarantee of directors, were borrower
93
constitution is a company would be treated as
third party guarantee
Application and Appraisal Format Annexure -I : Common loan application form for
loans upto Rs.1.00 crs.
Annexure -II :Appraisal below Rs.25.00 lacs
Annexure - III :Scoring Model below Rs. 25.00 lacs
Annexure - IV :Annual Review
Loan proposals for loans of Rs. 25.00 to Rs.1.00
crore have to be appraised on format "S".
Documentation
As per the SME documentation.
Sanctioning Authority
As per the scheme of delegation of powers.
Credit Rating
a. Below Rs. 25.00 lacs : Preliminary screening and
eligibility of the entrepreneur as per the scoring
model. (Annexure- III)
b. Rs. 25.00 lacs to `1.00 crore Simplified CRA
rating model as prescribed by CRMD.
Any deviation in “Hurdle Scores” against individual
risk parameters has to be approved by the
competent authority.
Review / Renewal
Working capital renewal every two years. However,
performance of the unit and conduct of account will
be reviewed annually for continuation of limits.
TAT
Under the scheme, formalities like valuation, NEC
cum lawyer's opinion, physical inspection of
collateral security, are generally not involved.
94
Hence, after receipt of completed application form
and documents as per checklist the loan has to be
sanctioned within two weeks time.
Invocation of
CGTMSE Guarantee
In case there is a slippage in the account,
Branch/CPC has to take proactive measure
including invocation of CGTMSE Guarantee in the
prescribed manner.
Product Code Product Description
For CC/OD accounts Product
Code
BR-CC SME COLLATERAL FREE
LOANS SSI
6114-1901
BR-CC SME COLLATERAL FREE
LOANS SBF
6124-1901
For TL/DL accounts
BR-SME COLLATERAL FREE LN SSI 6211-1901
BR-SME COLLATERAL FREE LN SBF 6221-1901
For Non Fund Based Facilities
BR-SME COLLATERAL FREE LOANS
BG
7211-1001
SME COLLATERAL FREE LOANS LC 7111-1001
Loans & Advances to Micro & Small Units have not
to be classified under C&I Segment.
Part - 2 : OPERATING GUIDELINES OF CGTMSE FOR ACCOUNTS COVERED
UNDER THE GUARANTEE SCHEME.
Credit facilities eligible The Trust covers credit facilities extended by member lending
institution(s) in respect of a single eligible borrower not
95
under the Scheme
exceeding Rs.100 lakh by way of term loan and/or working
capital facilities to the Micro and Small enterprises, without any
collateral security and\or third party guarantees.
Following credit facilities are eligible for coverage under
CGTMSE.
Condition for coverage
under
the Scheme
i. No collateral security and / or third party guarantee to be
taken by the Bank. However, in addition to the assets
created out of the bank finance, other encumbered
assets, which are directly associated with the business / project
can also be taken as security. The guarantee from the borrower
and partners etc. can also be taken except the guarantee of
directors in case loan is sanctioned to corporate borrower.
ii.The account has not become bad or doubtful of recovery; and
/ or
iii. The business or activity of the borrower for which the credit facility
was granted has not ceased; and / or
iv. The credit facility has not wholly or partly been utilized for
adjustment of any debts deemed bad or doubtful of
recovery, without obtaining a prior consent in this regard
from the Trust.
Extent of Guarantee
Cover
The category-wise extent of guarantee cover available is
given as under:
Category Maximum extent of Guarantee where
credit facility is :
Upto Rs.5
lacs
Above Rs.5
lacs upto
Rs.50 lacs
Above Rs.50
lacs upto
Rs.100 lacs
Micro Enterprises 85% of
the
amount in
default
subject to
a
maximum
of Rs.4.25
lacs
75% of
the amount
in Default
subject to
a maximum
of Rs.37.50
lacs
Rs.37.50 lacs
plus 50% of
amount in
default above
Rs.50 lacs
subject to
overall ceiling of
Rs.62.50 lacs
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Small Enterprises 75% of default max.
`37.50 lacs
Rs.37.50+
50% of
above Rs.50
lacs, Max.
Rs.62.50 lacs
Women
Entrepreneurs
/units located in
North East Region
(incl.
S
ikkim) (other than
credit facility upto
Rs.5 lacs to
micro enterprises)
80% of the amount in
default subject to a
maximum of Rs.40 lacs
Rs.40 lacs plus
50% of amount
in default above
Rs.50 lacs
subject to
overall ceiling
of Rs.65 lacs
All other category
of borrowers
75% of the amount in
default subject to a
maximum of Rs.37.50 lacs
Rs.37.50 lacs
plus 50% of
amount in
default above
Rs.50 lacs
subject to
overall ceiling of
Rs.62.50 lacs
Tenure of Guarantee The guarantee cover under the CGTMSE would be for
agreed tenure of the term loan/ composite credit. The tenure is 5
years or block of 5 years, in case of working capital credit
facility covered under CGTMSE
Lodging of applications In order to avail the guarantee cover lending institution must apply
for guarantee cover in respect of credit proposals sanctioned in
the quarter April-June, July-September, October-December, and
January-March before expiry of the following quarter viz. July-
September, October-December, January-March, and April-June
respectively.
The entire operations under the guarantee scheme are in
electronic mode (Online). For the purpose, all Operating Office of
the Bank are allotted with Member-id, User-id and Password.
The operating office concerned can log on to the website of
CGTMSE by using this information and submit the
applications online. CGTMSE picks the data uploaded by the
Bank, periodically from its website and process the
applications. The Operating Office concerned is required to login
97
to CGTMSE website and open the Reports module to
see the status of the applications lodged by it. As soon as the
guarantee cover is approved, a Demand Advice (CGDAN)
is generated and the Operating Office concerned can get the
same at the reports module in CGTMSE website. On receipt
of the Demand Advice, the requisite guarantee fee as indicated
in the Demand Advice, is to be remitted by the Operating Office
to CGTMSE by demand
draft payable at Mumbai.
Guarantee Fee For commencement of guarantee cover, a guarantee fee at
specified rate shall be paid upfront by the Member Lending
Institution to the Trust within 30 days from the date of first
disbursement or 30 days from the date of demand advice,
whichever is later.
Annual Service Fee The annual service fee at specified rate shall be paid by the lending
institution within 60 days i.e. on or before May 31, of every year. The
fee payable to the Trust under the CGTMSE is one-time guarantee
fee [which ranges from 0.75% to 1.5% of the credit facilities
sanctioned] and annual service fee [which ranges from 0.5% to
0.75% per annum on the credit facilities
sanctioned as on March 31, each year] as detailed below:
Credit Facility Upfront Guarantee(%) Annual Service
Fee (%)
NE Region
(incl
Sikkim)
Upto Rs.5 lacs 0.75 1.00 0.50
Above Rs.5 lacs to
Rs.50 lacs
0.75 1.50 0.75
Above Rs.50 lacs to
Rs.100 lacs
1.50 1.50 0.75
Lodgement of Claims The lending institution may invoke the guarantee in
respect of eligible credit facility if the following
conditions are satisfied: -
a) The guarantee in respect of that credit facility is in force.
b) The lock-in period of 18 months from either the date of last disbursement of the loan to the borrower or the date of payment of the guarantee fee in respect of credit facility to the borrower, whichever is later, has elapsed.
c) The amount due and payable to the lending
98
institution in respect of the credit facility has not been paid and the have been classified by the lending institution as Non Performing Assets. Provided that the lending institution shall not make or be entitled to make any claim on the Trust in respect of the said credit facility if the loss in respect of the said credit facility had occurred owing to actions / decisions taken contrary to or in contravention of the guidelines issued by the Trust.
d) The loan facility has been recalled and the recovery proceedings have been initiated under due process of law. But mere issuance of recall notice under SARFAESI Act 2002 cannot be construed as initiation of legal proceedings for purpose of preferment of claim under CGS. Lending institutions are advised to take further action as contained in Section 13 (4) of the above Act wherein a secured creditor can take recourse to any one or more of the recovery measures out of the four measures indicated therein before submitting claims for first instalment of guaranteed amount. In case the Bank is not in a position to take any of the action indicated in Section 13(4) of the aforesaid Act, they may initiate fresh recovery proceeding under any other applicable law and seek the claim for first instalment from the Trust.
On a claim being paid, the Trust shall be deemed to have been discharged from all its liabilities on account of the guarantee in force in respect of the borrower concerned.
Part 3: FAQs:
Issue Clarification
Whether the existing customers can
be covered under the scheme
Yes, Existing and new customers can be
covered under the scheme. In case of
existing units, additional credit facilities in the form
of term loan or renewal of working capital
facilities can be covered as and when the
facilities are extended, provided no
collateral security and/ or third party
guarantee is obtained.
Whether borrowers from all service
sector enterprises are eligible
under the Scheme?
As of now, all activities that come under
service sector as per RBI's guidelines on
'Lending to Priority Sector' and MSMED Act,
2006 except loan to retail/wholesale trade,
educational institutions and training
institutions etc are eligible for coverage
99
under the scheme.
Whether loans given to Small
Road Transport Operators are
eligible for coverage under the
Scheme?
Yes. Small road and water transport loans are eligible for guarantee cover.
Whether credit facility extended to
self-help group can be covered
under the scheme?
No. At present, as per the Scheme, the credit facility extended to Self Help Group cannot be covered.
Is it compulsory for the borrower to
obtain Income Tax Permanent Account
Number [IT-PAN] to be an eligible
borrower?
Yes, Under the Guarantee Scheme, a borrower is
required to obtain IT PAN number prior to availing
of credit facility. It is desirable to indicate IT Pan
No. in all the application irrespective of the
amount.
What is the definition of Primary
Security in respect of a credit facility
under CGTMSE coverage?
Primary Security" in respect of a credit facility shall
mean the assets created out of the credit facility
so extended and/or existing unencumbered assets
which are directly associated with the project or
business for which the credit facility has been
extended.
What is the difference between primary
security and collateral security?
Primary security is the asset created out of the
credit facility extended to the borrower and / or
other assets which are directly associated with the
business / project of the borrower for which the
credit facility has been
extended. Collateral security means any other
security offered for the said credit facility. For
example, Pledge/hypothecation of jewellery,
mortgage of house, etc.
Whether, any third party guarantee
obtained for the credit facilities will
make the account ineligible for
Yes, any third party guarantee (i.e. any other
person / corporate not connected with the project)
will make the account ineligible for guarantee
100
guarantee cover?
cover. However, borrower promoters, partners etc.
is not a third party
guarantee. In case loan is sanctioned to
Private/Public Limited company, the guarantee of
directors will be treated as third party guarantee.
Is it necessary that a borrower to be
eligible should obtain all the required
credit facilities from a single
institution?
Yes, all credit facilities should be made available
from a single institution. Credit facilities extended
jointly by two or more banks to a single borrower
or credit facilities extended jointly by two or more
institutions to a single borrower, shall not be
eligible for guarantee cover. However CGTMSE
coverage is available in respect of credit facility
extended by a commercial bank and SIDBI out of
SIDBI's Micro and Small Enterprises Fund for
North Eastern Region (NER)
Whether Co-financing to a MSE
unit by Financial Institution with a
Commercial Bank can be covered
under the Scheme?
Yes, joint financing by a financial institution (e.g.
SIDBI,NSIC, NEDFI) and Commercial bank can be
covered under the scheme. For e.g. MSE unit is
financed by term loan from State financial
institution and Working capital from a commercial
bank.
How long the guarantee cover is
available for credit facilities extended to
a particular borrower?
Guarantee will commence from the date of
payment of guarantee fee and shall run through
the agreed tenure of the term loan / composite
loans. Where working capital facilities alone are
extended to eligible Borrowers, it would be for a
period of 5 years or block of 5 years on renewal of
the guarantee cover, provided Bank pays the
Annual Service Fee as on March 31, latest by May
31 every year. Any renewal of guarantee cover
beyond 5 years can be done on a payment of
applicable guarantee fee.
What is meaning of amount in default
under the scheme?
Amount in Default" means the principal and
interest amount outstanding in the account(s) of
the borrower in respect of term loan and amount of
outstanding working capital facilities (including
interest) as on the date of the account becoming
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NPA or the date of lodgment of claim application
whichever is lower or such of the date as may be
specified by CGTMSE for preferring any claim
against the guarantee cover subject to a maximum
of amount Guaranteed.
NOTE: For formats given as per Annexure I to IV please refer to Circular No: NBG/SMEBU-
SMECFL/66/2010 - 11,November 16,2010.
It has now been decided, in supersession of all other related instructions issued
in the past, to make all loans to Micro and Small Enterprises (MSEs) up to Rs.
25.00 lacs compulsorily collateral free, subject to these being found eligible for
cover under the guarantee scheme of CGTMSE, except in cases where the
borrower opts out of the
scheme and provides adequate and acceptable collaterals.
e-Circular No. 360/3010 dated the 8th August 2010 issued by Credit Policy and
Procedures Department (CPPD)
“…it has been decided that the loans sanctioned to Micro & Small Enterprises up to Rs.1
crore that are eligible to be covered under CGTMSE scheme, will be exempted from
obtaining any collateral security as stipulated in the Bank’s loan policy …. The branches
will however ensure that all necessaryconditions laid down under the CGTMSE scheme
are strictly adhered to by them to safeguard Bank’s interest at all times.”
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TIE – UP WITH APOLLO HEALTH AND LIFESTYLE LTD.
1. Target Group
: Proposed franchisees of Apollo Health and Lifestyle Ltd.
projected to be around 200 clinics to be set up across the
country in the next 12 to 18 months
2 Eligibility
: � A special risk model has been devised for assessing the
eligibility of a proposed clinic based on which the
proposals will be taken up for financing.
3 Purpose : To finance franchisees of Apollo Health and Lifestyle Ltd. for
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setting up Apollo clinics as per the integrated model to offer
Specialist consultation, Diagnostics, Preventive health checks, a
24 hour pharmacy, etc., all under one roof.
4 Type of facilities : Term Loan and Cash Credit
5 Quantum of Finance : No cap
6 Margin : 33.33% for term Loan and 25% for Cash Credit
7 Rate of Interest
: 1.25% below SBAR floating with a minimum of 9% p.a. for both
TL and CC. CGM of Circle has the discretion to reduce the
interest rate to 1.25% below SBAR with a minimum of 8.50% p.a.
with monthly rests for TL repayable in 7 years.
8 Security:
- Primary
- Collateral
: Hypothecation of stocks and assets of the clinic
i)Collateral for a minimum of 50% of the Term Loan
ii)Personal guarantees of promoters
9 Processing fees 0.25% of the TL and Rs.250/- per lac for CC limit
10 Repayment
Maximum of 20 quarterly instalments excluding a moratorium of
12 months from the date of first disbursement
11 Documentation : As per revised C&I documentation
12 Special features
: � Bank has entered into an MOU with Apollo Health and
Lifestyle(AH&LL) to finance their franchisees for setting up
integrated clinics. AH&LL will follow stringent due diligence
procedure based on the following parameters ;-
� Reputation of the key promoters
� Personal wealth and contribution as equity
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� Business acumen of the promoter
� Experience of the promoter in healthcare
� Population per clinic in the town
� Location of the clinic
Proposals have to be subjected to risk analysis on the prescribed
matrix and categorized into one of three categories namely,
Extremely Satisfactory(A), Satisfactory(B) and Not
satisfactory(C).A and B category proposals can be taken up for
detailed appraisal as per CRA model on usual lines.
Inspection to be undertaken at monthly intervals
Insurance to be obtained for all assets financed by the Bank for
full value and for all risks
Product Highlights:
This product is a unique package for increasing our exposure to the healthcare sector
in a big way. The MOU with AH&LL envisages that the Apollo franchisees are chosen
by AH&LL after stringent due diligence which will be shared with the Bank.
Thereafter, the proposal will have to be vetted for Risk assessment on the specially
designed format and only if found acceptable, the detailed appraisal will have to be
taken up. Both TL and CC can be sanctioned as per need and if the CRA rating is at
least SB4/SBTL4.
Marketing Tips:
While the proposed Apollo clinics will provide ample scope for finance, the scope for
cross-selling of our other products such as Import LCs, Insurance for equipment
through our tie-ups with GIC, Medi–plus schemes for eligible patients, etc.
FAQs
Can we entertain proposals directly without routing through AH&LL?
105
It is advisable to have the proposal vetted and recommended by the Apollo to enable them to do
due diligence regarding the capability of the promoters to start such a clinic both on financial and
technical aspects
Can we entertain proposals with the financials of the project being either for a lower value or higher
value?
Yes. The project will have to be checked for financial viability to ensure prompt repayment of
instalments and interest.
State Bank of India
______________________ branch
Application cum interview form for financing of Apollo Clinics
Name of the Unit
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Address of reg. Office
In case of Corporate
Premises Owned / Rented
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Other services being provided
Year of commencement of business
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Experience in the line of activity
Constitution
Details of reconstitution in the past three years
Details of Proprietor / Partners / Directors
Name &
Qualification
Age PAN Residential
Address
Ph No / Mobile Net Worth *
* Opinion report on the bank’s prescribed format should be prepared.
Details of existing banking arrangements :
Name of the Bank
/ branch
Facility Limit Outstanding Banking since
107
Details of Associate / Sister / Identical Firms :
Name of the unit Name(s) of
pro/partners
Banking with Limit Outstandings
Details of registration under Shops & Establishment Act /
Sales tax Act / Any other Act.
Position regarding Statutory assessment under IT / Sales tax /
Any other Year upto which assessment completed.
Credit facilities required
Fund based Limit required Non fund based Limit required
Cash Credit (incl. of Bill
/ Chq purchases)
Letters of Credit if any,
Term Loan Bank guarantees, if any
Total Total
For term loans – Details of assets to be acquired (pl. enclose detailed list if necessary)
108
Description Details of the supplier Cost Time schedule for
completion
Need for the proposed expenditure
Cost Amount Means Amount
Land & Building Own funds
Equipment (proforma
invoice to be enclosed)
Other loans
(specify source)
Other assets Bank loan
Total Total
Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc…)
Performance Parameters Post / projects
Past three
years
Projections
31.3 31.3 31.3 31.3 31.3
Sales / income
Net Profit
Depreciation
Cash Accrual
Tangible Net
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Worth
TOL / TNW
DSCR
For term loans, please enclose projected profitability statements covering the period of repayment
Details of Security offered
Primary
Collateral
(i) Immovable property
Description of property Name of the Owner Value of the property Basis of Valuation
(ii) Liquid securities
Description Name of the
owner
Face Value When Acquired Present value
Details of Guarantor Where applicable
Name of the
Guarantor &
address
Age Qualification Net worth Banking with
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I/We declare that the information given in the application form are true, correct and complete and
that they shall form the basis of any kind of facility State Bank of India may decide to extend to me /
us. I / we shall furnish all other information that may be required by bank in connection with my
application. The information may also be exchanged by you with any agency you may deem fit. You
may take appropriate safe guards / action for recovery of bank dues including publication of
defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing
arrangements for the unit with any bank except those indicated in the application. I / We confirm
that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there
are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency
proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to
abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended
to me / us.
Signature of Borrower
Date : Name of the Interviewing Official
Place :
State Bank of India
______________________ branch
Application cum interview form for financing of Apollo Clinics
Name of the Unit
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Address of reg. Office
In case of Corporate
Premises Owned / Rented
Address of the Unit
Phone No.
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Fax No.
Email / website
Premises Owned / Rented
Other services being provided
Year of commencement of business
Experience in the line of activity
Constitution
Details of reconstitution in the past three years
Details of Proprietor / Partners / Directors
Name &
Qualification
Age PAN Residential
Address
Ph No / Mobile Net Worth *
* Opinion report on the bank’s prescribed format should be prepared.
Details of existing banking arrangements :
Name of the Bank
/ branch
Facility Limit Outstanding Banking since
112
Details of Associate / Sister / Identical Firms :
Name of the unit Name(s) of
pro/partners
Banking with Limit Outstandings
Details of registration under Shops & Establishment Act /
Sales tax Act / Any other Act.
Position regarding Statutory assessment under IT / Sales tax /
Any other Year upto which assessment completed.
Credit facilities required
Fund based Limit required Non fund based Limit required
113
Cash Credit (incl. of Bill
/ Chq purchases)
Letters of Credit if any,
Term Loan Bank guarantees, if any
Total Total
For term loans – Details of assets to be acquired (pl. enclose detailed list if necessary)
Description Details of the supplier Cost Time schedule for
completion
Need for the proposed expenditure
Cost Amount Means Amount
Land & Building Own funds
Equipment (proforma
invoice to be enclosed)
Other loans
(specify source)
Other assets Bank loan
Total Total
Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc…)
114
Performance Parameters Post / projects
Past three
years
Projections
31.3 31.3 31.3 31.3 31.3
Sales / income
Net Profit
Depreciation
Cash Accrual
Tangible Net
Worth
TOL / TNW
DSCR
For term loans, please enclose projected profitability statements covering the period of repayment
115
Details of Security offered
Primary
Collateral
(i) Immovable property
Description of property Name of the Owner Value of the property Basis of Valuation
(ii) Liquid securities
Description Name of the
owner
Face Value When Acquired Present value
Details of Guarantor Where applicable
Name of the
Guarantor &
address
Age Qualification Net worth Banking with
116
I/We declare that the information given in the application form are true, correct and complete and
that they shall form the basis of any kind of facility State Bank of India may decide to extend to me /
us. I / we shall furnish all other information that may be required by bank in connection with my
application. The information may also be exchanged by you with any agency you may deem fit. You
may take appropriate safe guards / action for recovery of bank dues including publication of
defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing
arrangements for the unit with any bank except those indicated in the application. I / We confirm
that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there
are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency
proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to
abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended
to me / us.
Signature of Borrower
Date : Name of the Interviewing Official
Place :
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State Bank of India
______________________ branch
Application cum interview form for financing of Apollo Clinics
Name of the Unit
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Address of reg. Office
In case of Corporate
Premises Owned / Rented
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Other services being provided
Year of commencement of business
Experience in the line of activity
Constitution
Details of reconstitution in the past three years
Details of Proprietor / Partners / Directors
Name & Age PAN Residential Ph No / Mobile Net Worth *
118
Qualification Address
* Opinion report on the bank’s prescribed format should be prepared.
Details of existing banking arrangements :
Name of the Bank
/ branch
Facility Limit Outstanding Banking since
Details of Associate / Sister / Identical Firms :
119
Name of the unit Name(s) of
pro/partners
Banking with Limit Outstandings
Details of registration under Shops & Establishment Act /
Sales tax Act / Any other Act.
Position regarding Statutory assessment under IT / Sales tax /
Any other Year upto which assessment completed.
Credit facilities required
Fund based Limit required Non fund based Limit required
Cash Credit (incl. of Bill
/ Chq purchases)
Letters of Credit if any,
Term Loan Bank guarantees, if any
Total Total
For term loans – Details of assets to be acquired (pl. enclose detailed list if necessary)
Description Details of the supplier Cost Time schedule for
completion
120
Need for the proposed expenditure
Cost Amount Means Amount
Land & Building Own funds
Equipment (proforma
invoice to be enclosed)
Other loans
(specify source)
Other assets Bank loan
Total Total
Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc…)
Performance Parameters Post / projects
Past three
years
Projections
31.3 31.3 31.3 31.3 31.3
Sales / income
Net Profit
Depreciation
Cash Accrual
Tangible Net
Worth
TOL / TNW
DSCR
For term loans, please enclose projected profitability statements covering the period of repayment
121
Details of Security offered
Primary
Collateral
(i) Immovable property
Description of property Name of the Owner Value of the property Basis of Valuation
(ii) Liquid securities
Description Name of the
owner
Face Value When Acquired Present value
Details of Guarantor Where applicable
Name of the
Guarantor &
address
Age Qualification Net worth Banking with
I/We declare that the information given in the application form are true, correct and complete and
that they shall form the basis of any kind of facility State Bank of India may decide to extend to me /
us. I / we shall furnish all other information that may be required by bank in connection with my
application. The information may also be exchanged by you with any agency you may deem fit. You
may take appropriate safe guards / action for recovery of bank dues including publication of
defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing
arrangements for the unit with any bank except those indicated in the application. I / We confirm
that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there
are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency
proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to
122
abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended
to me / us.
Signature of Borrower
Date : Name of the Interviewing Official
Place :
APPRAISAL FORMAT FOR FINANCING FRANCHISEES OF APOLLO CLINICS
Proposals for financing of franchisees of Apollo clinics need to be appraised based on the Risk
Parameters that are given below. The methodology of calculation of the score in the below
mentioned risk matrix is :
o Assign any one of the three codes (A, B & C) to all the considerations as above.
A = Extremely Satisfactory.
B = Satisfactory &
C = Not Satisfactory
o The marks assigned to these codes are A = 10, B = 6 & C = 3
o Calculate the total score of the risk matrix by multiplying weightage of each
consideration with the marks of these codes (e.g. if a proposal gets B in “location of
the clinic” then, 10%* 6 =0.6 mark would be given to the first consideration and
accordingly the sum or all consideration will be calculated for the proposal).
1 2 3 4 5
Parameters Considerations Weightage Code
(A, B, C)
Score 3*
4
Location
(30%)
Location of the Clinic 10%
Population / No. of polyclinics in
the city or region
20%
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Owner
(50%)
Reputation of the owner 25%
Personal wealth of the owner 10%
Previous business performance 15%
Projections
(20%)
Cash flow estimates 20%
Total
Based on the score achieved by every proposal, the collateral security is to be decided. Maximum
score that can be achieved by a proposal is 10 and minimum score is 3. The calculation of collateral
security to be made as under.
Score received by the proposal Collateral security to be considered
8 or more than 8 50% of the term loan amount
6 or more but less than 8% 75% of the term loan amount
4 or more but less than 6 100% of the term loan amount
Less than 4 Term Loan not to be considered
The minimum collateral security stipulated is 50% of the Term Loan.
6. To set up a typical Clinic as envisaged by Apollo, the franchisee would be required to lease / own
premises of around 3200 sq. ft. The total estimated cost of the project would be in the region of Rs.
170 lacs. The debt equity ratio desired is 1:1.
Project Cost of around Rs. 1.72 crore consisting of :
Lease Deposit 4.80
Medical Equipment 70.60
Interiors, Civil Modification, Furniture, AC, Electrical 45.00
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Information technology (Hardware and Software) 12.00
Preliminary and Pre-operative expense 13.00
Working Capital Margin 3.00
Contingency Funds and Others 3.50
License Fees for AHLL (+10.2% service Tax) 20.00
Total – 171.90
The revenue generation from Consultation, Health Checkups, Diagnostics Pharmacy and other
facilities are expected to be Rs.140 lacs in the first years of operation. The turnover is expected to
double in the 4th year. The cash break even is likely to take around 5/6 months while the expected
payback period is 4-4.5 years with a post tax IRR of up to 25%.
7. There is an understanding with Apollo that all the applications will be processed within 10
days from the date of receipt of application and complete documents. Branches should ensure
sanctity of the commitment made by the Corporate Centre with Apollo.
SBI Small and Micro Interest-free Loan as Equity (SBI SMILE)
SBI Small and Micro Interest-free Loan as Equity (SBI SMILE)
1.1 Objective: The scheme envisages grant of interest free loan repayable over a long period to assist eligible professional and technically qualified entrepreneurs setting up new Micro and Small enterprises (MSEs) and units covered under the Bank’s Project Uptech for technology upgradation. The salient features of the scheme are us under:
1.2 Eligibility criteria a). It should be a new unit i.e., the person approaching for interest-free loan as equity loan assistance (ELA) should be setting up his activity for the first time excepting in the case of units covered under the Bank’s Project Uptech programme where the units are already in operation.
125
b).Equity assistance is provided only to persons genuinely not able to meet the necessary margins from their own resources.
c). The entrepreneur must devote his direct and full attention to the unit. He should not be involved in any other unit in any capacity-proprietary or administrative.
d). The entire borrowings should be confined to the Bank.
e). The project should be eligible for assistance under any of the Bank’s Liberalised scheme.
f). Professionals and Technically qualified persons for this scheme will cover doctors including dentists, engineers (diploma and degree holders), management graduates etc.
g). The unit should be engaged in activities eligible for classification as Micro and Small Enterprises under MSME Act excepting retail trade. The investments in plant and machinery/ equipments of such units should also conform to the eligibility criteria of Micro and Small enterprises under the Act.
h).The total cost of the project should be more than Rs.10.00 lacs.
1.3 Extent of assistance:
Equity assistance up to a maximum of Rs.10 lacs for Micro and Small Scale industries and units under Project Uptech and Rs.5 lacs- for professionals and self-employed persons can be granted subject to a minimum of Rs.1.00 lacs for industrial units and Rs.50,000/- for professionals and self employed persons.
Equity assistance should be in multiples of Rs.1000/- rounded off to the nearest thousand. Though request for second ELA to an eligible borrower for expansion of activity should not be entertained, during the process of implementation of the project, if there is any escalation in the project cost, additional ELA may be considered, subject to the above ceilings.
1.4 Computation of assistance:
The actual amount of assistance to be granted under the Scheme, subject to the ceiling mentioned above, is the difference between the applicable margin and the capital contributed by the entrepreneur including seed capital and subsidy, if any. Minimum margin required is 15%.
However, the capital contribution by the entrepreneur should not be less than 50% of the margin requirement as stated above.
1.5 Minimum equity contribution:
Every entrepreneur will have to contribute a minimum share 7.5% of the cost of project as equity.
1.6. Application, appraisal and sanction:
No separate loan application form is required for assistance under the ELA as it is an integral part of the loan under the Bank's other schemes. A separate letter from the borrower requesting equity assistance should, however, be obtained. The procedure for appraisal and sanction is the same as in normal cases. However, techno-economic vetting may got done by Bank’s Consultancy Services Cell/external consultants. Control Return should be submitted to the Controlling Authority.
1.7 Security: The security available for other loans to the unit should be extended to cover equity assistance also.
1.8 Interest: Funds lent under the Equity Loan Assistance Scheme will bear no interest. Other loans sanctioned to the unit will carry interest at normal rates prescribed by the Bank from time to time. In the event of mis-utilisation of the loan or non-compliance of stipulated terms, etc., the loan
126
account for equity fund assistance would attract interest, at the Bank’s discretion, even for the entire period.
1.9 Documentation: As per the Manual on Documentation.
1.10 Repayment: ELA can be repaid over a period of 3 years after an initial moratorium period of 5 to 7 years (during which period other term loans are repaid).
1.11 Accounting system:
Equity Loan Assistance will be sanctioned and disbursed in the same manner as Term Loans. Each ELA account should be styled as "M/s_ _ _ _ _ _ _ _ ELA A/c." and maintained along with other Medium Term Loan accounts.
1.12 Disbursement:
ELA may be disbursed in lump sum or in instalments, depending on the convenience of the unit as a Clean Term Loan. The component relating to the working capital requirement should be credited to the cash credit account of the unit.
1.13 Follow-up:
As the Bank would be disbursing the amount by way of a Clean Term Loan for a long period, the performance of the unit should be closely monitored. Assistance of the Bank's Consultancy Services Cell /Empanelled Consultants may be sought for vetting the project report and solving the problems, if any, faced by the unit.
1.14 Reporting:
A return on Equity Loan Assistance on the prescribed format as given in Annexure-IA) should be sent at half yearly intervals to the Local Head Office who in turn would arrange to compile the return for the Circle and send a copy to Central Accounts Office and SME BU at Corporate Centre.
Annexure-IA
STATE BANK OF INDIA, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ CIRCLE
SBI Small and Micro Interest-free Loan as Equity (SBI SMILE) REPORT FOR THE HALFYEAR
ENDED 30T H SEPTEMBER/31S T MARCH
(Rs. In lacs)
Sl. No.
Name of the unit and its propriet-or /
partners
Date of
Sancti on
Town/
city where
loca ted
Produ-ct /
Activity
Total project
cost
Unit’s contribution to equity
Assist-ance
sanction-ed under
ELA
Total of other loans sanctioned by the Bank
Out side
loans, if any
Remarks
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
127
Total sanctioned during the half-year : Rs. _ _ _ _ _ _ _ _ _ _ _ ( _ _ _ _units)
Cumulative sanctions under “SBI SMILE”: Rs. _ _ _ _ _ _ (_ _ _ _ _ _units)
Date:
ARTISAN CREDIT CARD
1. Target Group
: Artisans in the handicrafts sector and NOT covered by the
government sponsored loan schemes.
2 Eligibility
: � Minimum score of 60% under the simplified scoring
model
� Preference to be given to artisans registered with the
Development Commissioner (Handicrafts)
� Thrust to be to finance in clusters and preferably those
supported by a Self Help Group (SHG)
� Existing borrowers with limits upto Rs.2 lacs and
satisfactory track record are also eligible.
3 Purpose
: For working capital requirements as well as cost of tools and
equipment required for carrying out the manufacturing process.
4 Type of facilities
: A cash credit limit supported by a photo card which indicates
the limit and validity and a passbook
5 Quantum of Finance : Maximum of Rs.2 lacs. Assessment to be made under Nayak
Committee norms and will be based on the simplified Scoring
Model. The minimum score to be obtained for being eligible for
128
finance is 60%
6 Margin
: Upto Rs. 25000/- NIL
Over Rs.25000/- and upto Rs.2 lacs 20%
7 Rate of Interest
: Upto 50000/- 1.75% below SBAR
over Rs.50000/- 0.75% below SBAR
8 Security:
- Primary
- Collateral
:
Hypothecation of assets financed by the Bank
NIL Credit Guarantee Fund Trust for micro and small enterprises
covers loans under Artisan Credit Card. The fees for the same
will be reimbursed by the Development Commissioner
(Handicrafts, Ministry of Textiles, GOI through their Regional
Directors.
9 Processing fees As applicable to SSI segment but no fees to be charged for
review/renewal.
10 Repayment
The portion of limit used for purchase of tools, etc. may be
made repayable in 3years. The rest of the limit will be a
revolving cash credit limit to be reviewed every year but valid
for 3 years subject to satisfactory conduct of account.
11 Documentation
: As per simplified SME documentation
12 Special features
: � New units can also be financed
� Beneficiaries registered with the Development
Commissioner (Handicrafts) will be eligible for insurance
cover under group guarantee scheme for which the
premium will be paid by the government and the
beneficiaries in the ratio 60:40
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13 Methodology and
Operation of the
account
The beneficiaries of the scheme will be issued a photo ID card
which contain name, limit and validity of the facility. A passbook
will also be issued which will contain all details of the beneficiary
including address, and all transactions will be recorded in it on
an ongoing basis.
Product Highlights:
This scheme aims at providing adequate and timely assistance to the artisans to meet their credit
requirements both for investments as well as for working capital in a flexible manner and at
reasonable rate of interest.
The facility will be extended by way of a revolving cash credit and the limit will be fixed based on the
assessment made as per Nayak Committee norms. The assessment of the credit limit should include
the cost of tools and equipment required. A photo ID card and a passbook will be issued and the
limit will be valid for 3 years subject to annual review.
Marketing tips:
� The office of the Development Commissioner (Handicrafts) can provide a list of artisans
registered with them. Preference should be given to these registered artisans for giving
the artisan Credit Card.
� Clusters of artisans , especially those who are supported by a Self Help Group should
also be preferred for offering this product.
� The borrower need not furnish any financial data and assessment has to be made based
on the level of activity in the unit and other corroborative details.
FAQs
� Can existing borrowers be given this facility?
Existing borrowers under the Bank's are eligible for this scheme. However, beneficiaries
of other government sponsored schemes are not eligible for this facility.
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� What is the margin to be stipulated for the credit limit?
Upto Rs.25000/-, no margin & over Rs. 25000/- , 20% margin has to be fixed.
SME CREDIT CARD
1. Target Group
: SSI units, tiny units, village industries, Retail traders,
professionals, self- employed, etc..
2. Eligibility
: Customers of the following segments with a satisfactory
track record for the last two years :-
� Small industrial units
� Small retail traders
� Professionals
� self employed persons
� Small business enterprises
� Transport operators
3. Purpose : To meet any kind of credit requirements including purchase of
shop
4. Type of facilities : Cash Credit and/or Term Loan
5. Quantum of Finance : Maximum - Rs. 10lacs
6. Margin : 20%
7. Rate of Interest : As applicable to the market segment
8. Security:
- Primary
- Collateral
: Hypothecation of stock in trade, receivables, machinery, office
equipment
SSI – No collateral is to be insisted upon
SBF—For loans more than Rs.25000/- charge over movable
/immovable property/third party guarantee
9. Processing fees As applicable to SSI/SBF units
10. Repayment
: a) The working capital component should be reviewed every
year provided the credit summation is not less than 50% of
the projected turnover. If the credit summation is less than
50%, then a repayment schedule should be fixed for the
outstandings in suitable monthly instalments.
b) The Term Loan component should be repayable in a
maximum of 5years in suitable instalments.
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11. Documentation : As per the nature of the facility
12. Special features
: Assessment A scoring model has been designed and those
units which score a minimum of 60% qualify under the Scheme
for which the working capital assessment will be made as under
:-
i) For small business, retail traders, etc.,
- 20% of their annual turnover OR
- 20% of turnover of the last 12 months in their
accounts, whichever is higher.
ii) For self- employed and professionals
- 100% of gross annual income as declared in their
income tax return
iii) For SSI units
- As per Nayak Committee norms ie.,
20% of annual turnover
Validity The limit will be valid for 3 years but is subject to annual
review
13. Methodology and
Operation of the
account
: - The borrower will be issued a photo identity card indicating
sanctioned limit and validity of the limit.
- Cheque book to be marked as SME Credit Card
- Pass Book to be issued
- Submission of stock statements is waived but should be
obtained once in the last quarter to meet RBI stipulations
- Brief opinion report should be recorded.
Product Highlights:
Small business units small industries in the tiny sector, retail traders, professionals
and self employed persons, requiring working capital needs are very often unable to
provide the elaborate financial data sought by banks from time to time for assessing
their credit needs. To obviate this difficulty faced by the small units in SSI & SBF
sectors, the Bank has designed this product which comprises of a photo identify card
and a passbook which gives details of the limit and validity of the facility. The
assessment is based on a simple scoring model and units which score 60% or more
are eligible for this working capital cum term loan facility upto Rs.10 lacs valid for a
period of 3 years.
Marketing Tips
132
• This is a very user friendly product for any type of entrepreneur located in
metro, urban, semi urban or rural areas.
• Small SSI units, retail traders, self employed professionals, small business
enterprises etc., are the ideal target group.
• The limit being valid for 3 years for properly conducted accounts is a major
plus point of this product.
• Stock statements are not required to be submitted except once a year.
FAQs
� Can the limit be increased within the 3 year validity of the card ?
Yes. If the account has been conducted well and the unit requires a higher limit , then
the limit can be enhanced subject to a maximum of Rs.10lacs.
� Can a Kisan credit card holder be given this card ?
No. Any borrower is entitled to only one type of a credit card.
Application for SME / ARTISAN Credit Card
01. Name of the Unit
02. Constitution Proprietary Partnership
Company
03. Address Business
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Telephone No.
04. Address Residential
Telephone /Mobile No.
e-mail address
05. Age of proprietor/Mng.
Partner
18-30 Years 31-45 Years
46 & above
06. Owning a House Own (Not mortgaged)
Own
Not owning
07. Academic Qualifications Technical Professional
Graduate Undergraduate
08. Spouse Detail Employed Not working
09. Income Assessed Under IT Yes No
10. Taken Life Insurance Policy Yes No
11. Whether belongs SC/ST Minority Community ?
Male Female
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Ex-Serviceman
12. SSI Registration Number
(as given by DIC)
PAN No. /
TAN
Business Details
13. Description of Activity:
Dealing with business since:
15. Track Record
Year 1 Year 2 Year 3 Year 4 Year 5
Sales
14. Project Details Rs. In lakhs
Cost of Project Amount Means of
finance
Amounts
Fixed Assets
Current Assets Working
Capital
Term Loan
Others
Total Total
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Profit
16. Banking with SBI
Details of Deposit A/c Since
Details of Advance A/c Since
Loans Repaid
17. Marketing Arrangements : Tie ups Ancillary Units
Others
18. TOL CA
TNW CL
19. DSCR
20. Amount of Loan required
21. I / we certify
(i) all information furnished by me is true, correct and complete.
(ii) I / we have no borrowing arrangement for the unit with any Bank except as indicted in
the application.
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(iii) There are no overdues / statutory dues against me / us
(iv) No legal action has been taken against me / us.
(v) The information may also be exchanged by you with any agency you may deem fit.
(vi) I / we shall furnish all other information that may be required by Bank in connection
with my application.
(vii) You, your representative or any other agency as authorized by you may at any time
inspect / verify my/our assets, books of accounts, etc., in our factory/business premises
as given above.
(viii) You may take appropriate safeguards / action for recovery of Bank’s dues including
publication of defaulter’s name in website / submission to RBI.
(ix) We further agree that my / our loan will be governed by the rules of State Bank of India
which may be in force from time to time.
Place:
Date: Signature of the Applicant.
Note: Documentary proof in the form of originals with self attested copies to be produced for
verification. Originals to be returned and attested copies to be filed along with application.
137
APPRAISAL NOTE FOR SME CREDIT CARD
(Quantum of Finance Maximum Rs.10.00 lakhs)
PROPOSAL FOR SANCTION OF
1.
2.
CREDIT SCORE: /60. (Minimum 36) (as per annexure-I) Segment : SSI/SBF/C&I
1.Name of the unit
2 Constitution
Registration No. of the unit.( if
applicable)
3.Name of the Proprietor/
Partners /directors
4. Business Address
Phone/Cell No.
5.Nature of activity
6. Banking with us from
7.Details of Limits as on date.
(Rs.in lakhs)
Existing Limits Proposed Limits
CC(Hyp) CC(Hyp)
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TL TL
LC/BG LC/BG
Total indebtedness
8.Brief History
(Brief bullet points only)
(on Management, products,
marketing tie-up etc.,)
1.
2.
3.
4.
5.
9.Project Details
(If term loan is required)
Project Cost Rs.
Bank Loan Recommended Rs.
(As per assessment in annexure-III)
Debt /Equity-
10. Financial Position: (Rs in lakhs)
Years 1
(Act.)
2
(Act.)
3
(Est.)
4
(Proj.)
Sales income
Profit
Profit/net sales
Tangible Net worth
TOL/TNW
Current Ratio
11. Working Capital
Requirement
Working capital limit of Rs. Has been assessed as per the
Projected turnover method (Nayak Committee method) as per
the workings as on annexure-II.
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12. Adverse remarks
unattended in last Inspection
& audit report, if any.
13. Whether borrower/
promoters figure as defaulters
in CIBIL report for individuals.
14. Details of Associate
concerns. Any NPA’s
15. Terms & conditions
i) Primary Security Hypothecation of plant & machinery purchased out of bank
finance.
Hypothecation of all kinds of Stocks & receivables.
( cover period for receivables ----- days)
ii) Collateral Security
(not applicable if sanctioned
under CGTFSI)
iii) Guarantee Personal guarantee of Sri.
(Indicate Net worth of Guarantors with date of compilation of
opinion reports)
iv) Margins WC TL
v) Documents As per SME documentation
vi) Submission of Stock
Statements
To be submitted annually. Submit once in the last quarter of the
year.
vii) Validity WC loan is valid for 3 years, but is subject to annual review.
viii) Insurance Stocks/Equipment to be insured for full market value for all
possible risks with bank clause.
ix) Inspection Quarterly/Half yearly.
x) Repayment
xi)Rate of interest -------% above/below SBAR, effective rate;
xii) Upfront fees/Processing
Charges
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xiii) Charges with ROC
(If applicable)
16. Recommendations
Recommended for sanction of Working Capital limit of Rs.
Term loan of Rs.
Total limit --------------
On the above terms and conditions.
Signature
Name
Designation
Date
Appraised & Assessed by Sanctioned by
Enclosure:
Applicant’s application & others
Controlled by
Signature
Name
Designation, Date
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Annexure-I
SCORDING MODEL – SME CREDIT CARD / ARTISAN CREDIT CARD Sl.
No.
Parameters Max.
Marks
Marks
Scored
Criteria Marks
1. Age 3 18 – 30
31-45
46 & above
3
2
1
2. Owning House 3 Own (NM)
Own (M)
Not owning a house
3
2
0
3 Academic
Qualification
5 Technical
Professional / PG
Graduates
Less than Graduate
5
4
3
2
4. Experience
In line of trade
4 More than 5 years
3-5 years
1-3 years
Less than one year
4
3
2
1
5. Loyalty
(Deposit / Advances)
3 Dealing with SBI
More than 3 years
1-3 years
Less than one year
3
2
1
6. Spouse
Details
2 Employed
Home-maker
2
0
7. Assessed for IT 2 Assessed
Not assessed
2
0
8. Has Life Insurance Policy 2 Yes
No.
2
0
9. Track record of repayment of
Personal loan
3 Prompt/No loan
Irregular
3
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10. Continuous profits 5 Last 5 years
Last 3 years
Last year
5
3
1
11. Sales show rising trend 5 Last 5 years
Last 3 years
Last year
5
3
1
12. Marketing 3 Tie-up arrangement in
operation
Ancillary
Others
3
2
1
13. TOL./TNW 5 Less than 1
1 to 2
2 to 4
More than 4
5
4
3
0
14. CA / CL 5 More than 1.33
1 to 1.33
Less than 1
5
3
0
15. DSCR 5 More than 2
1.5 to 2
1 to 1.5
Less than 1
5
3
2
0
16, Routing of sales turnover through the
account
5 100%
75%
50%
<50%
5
4
3
1
Total 60
N.B. In case any of the above parameters is not applicable, the scoring should be normalised out of
60.
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Annexure-II
Name of the Borrower:
ASSESSMENT OF WORKING CAPITAL
I. For SSI, SBF and Retail traders:
Projected Turnover Method (Nayak Committee Method)
A. Estimated Sales for the Current year Rs.
B. Working capital required (25% of A) Rs.
Eligible Bank Finance (80% of B) Rs.
Bank finance Required Rs.
Working Capital Assessed/recommended is
II. For Self Employed and Professionals
50% of Gross annual income as declared in their Income Tax return.
III. Comments on Production aspects: (covering location advantages, availability of raw material and
other utilities like water, power, fuel, labour etc.
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IV. Brief Comments on Marketing Aspects:
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Annexure-III
Name of the Borrower:
Assessment of Term Loan:
1.Project Details
Rs.in lakhs.
Project cost
Cost Margin (%) Margin amount Required Bank
Finance
Plant& Machinery
Land &Buildings
WC margin
Contingencies
Total project cost
Means of finance
Own funds
Borrowings from
friends and relatives
Bank finance
others
Total means of
finance
Debt /Equity-
2. Term Loan Assessment: Rs.in lakhs
Years 1 2 3 4 5 6
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(Act) (E) (E) (E) (E) (E)
Net Profit
Depreciation
Cash Accruals
Repayment obligations
(including Interest)
DSCR
Average D.S.C.R-
3. Details of machinery/equipment proposed to purchase:
4. Project implementation schedule:
147
Annexure-III-A
(for SRTO’s)
Name of the Borrower:
Term Loan assessment for Transport Operators (SRTO)
Cost of Vehicle/s Rs.
Borrower’s Margin ( %) Rs.
Term loan recommended Rs.
Assessment:
Earnings
1 Total No. of Kilometers to be run per day (estimated)/ No. of trips per
day
2 Earnings per Km / earning per trip
3 No. of working days in a month
4 Total monthly earnings 1 x 2 x 3 …..A
Expenses
5 Cost of Fuel per litre
6 Quantity of fuel required per month
7 Cost of fuel per month
8 Monthly Wages / batta for driver / cleaner etc
9 Maintenance
10 Repair
11 Insurance (annual premium / 12)
12 MV Tax (annual tax /12)
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13 Interest on borrowings
14 Sustenance
15 Other expenses
Total Monthly Expenses (5 to 15)….B
16 Monthly surplus …. A - B
17 Monthly TL repayment
18 DSCR 16/17
Brief details of above workings:
149
ANNUAL REVIEW OF SME CREDIT CARD
PROPOSAL FOR REVIEW OF WC AND TERM LOAN SANCTIONED UNDER ‘SME CREDIT CARD’
SCHEME.
1.Name of the unit
2 Constitution Proprietorship/Partnership/Private limited Company
3.Name of the
Proprietor/partners/ /directors
4. Business Address
Phone/Cell No.
5.Nature of activity
6. Date of Last Sanction/review
7. IRAC Position as on
8. Present Position of Accounts
as on date of review.
(Rs. In lakhs)
Facility Limit DP O/S Irregularity if any
CC
TL
LC/BG
Total indebtedness
9. Conduct of WC a/c
(Rs. In lakhs)
Annual Turn over estimated Rs.
Annual Credit Summations in the account Rs.
(Atleast 50% should be routed in the account, other wise
sanctioning authority has to take a view on continuation of
facility)
Value of the account: Rs.
150
(Interest/Exchange/commission Booked)
Any Cross selling Products Booked :
(Give the name of the product booked)
10.a) Whether earlier sanctioned
terms complied with?
b) Comments on non-
achievement of estimated
sales/profit.
c)No.of times the account was
irregular last year and reasons.
11.Comments
(from risk angle)
(On other associates,
Competition, quality of products,
I&A comments, CIBIL report for
individuals etc., and other
relevant to Risks. Bullet points
only)
11. Recommendations
The Conduct of WC loan and Term loan has been reviewed and found satisfactory. Recommended
for continuation of Working Capital limit of Rs.
On the above terms and conditions as already set out in the original sanction dated—
(mention the date)
151
Signature
Name
Designation
Date
Appraised by Approved by
SWAROJGAR CREDIT CARD
1. Target Group
: Self employed persons such as rickshaw owners, fishermen,
handloom weavers, service sector for example, TV mechanics,
and other micro-entrepreneurs, and SHGs.
2 Eligibility
: Individuals or group of individuals engaged in any viable micro-
enterprise. SHGs can also be provided with this facility jointly
with the entrepreneur.
3 Purpose
: For meeting the investment needs as well as the working capital
requirements of self –employed persons
4 Type of facilities
: Composite Loan which comprises of a Term Loan and a
revolving Cash Credit account. The borrower can avail the entire
component as a TL or for working capital only as per the actual
requirement,
5 Quantum of Finance : Rs. 25000/- per borrower as composite loan . This can be
increased to Rs.30000/- in deserving cases. The initial
investment in fixed assets and/or working capital requirement
152
/recurring expenditure are to be taken as the basis for fixing the
limit. The cash credit limit should be fixed based on the
operating cycle to the extent of the available balance after
fixing the TL component A component not exceeding 20% of
limit can be can be built in for consumption purposes in view of
the family's contribution in the productive activity.
6 Margin
: NIL
7 Rate of Interest
: As applicable under SIB segment
8 Security:
- Primary
- Collateral
:
Assets acquired from Bank finance
NIL
9 Processing fees Waived
10 Repayment
TL is repayable in 5 years in suitable instalments
Cash credit limit should be normally repaid in 12 months and
renewed annually based on the conduct of the account and
repayment of the Term Loan. If the CC account remains
continuously irregular for 90 days or remains outstanding
for 12 months, no further debits should be permitted.
11 Documentation
: As per simplified SME documentation
12 Special features
: � The facility should be covered under the Group
Insurance Scheme and the cost borne by the Bank and the
borrower equally
� BMs have absolute freedom to select the borrowers for
this product and there is government subsidy for this scheme
� Withdrawal from the account will be through a
withdrawal slip or cheque.
� The SCC holder can be permitted to open a Savings bank
account.
13 Methodology and
Operation of the
The borrowers will be issued a laminated credit card and a
passbook. This will as an identity card and to record the
transactions on an ongoing basis. The passbook will contain the
153
account
repayment schedule of the term loan also. A passport size
photograph of the borrower will be affixed on the credit card
and the borrower will have to produce both the credit card and
the passbook for withdrawal from the account.
Self Help Groups(SHGs) can also be issued these cards and they
will be jointly and severally liable for the amount.
As far as possible cluster approach should be adopted for this
product.
Product Highlights:
This is a product similar to the Kisan Credit Card. Self employed persons in activities
other than agriculture in urban and other areas are eligible to apply for this product
for meeting their investment or working capital requirements. The borrower will be
provided with a photo ID card and a passbook which have to be produced at the time
of each withdrawal from the account. SHGs can also be issued this card.
Marketing tips:
SHGs operating in the area of operation can be offered this product as it would have an element of
group guarantee in such a case and improves the chances of repayment.
CYBER PLUS
154
1. Target Group
: Educated youth with basic computer knowledge especially in
rural and semi-urban centres. Women entrepreneurs are to be
given preference
2. Eligibility
: Educational qualifications –minimum SSC or 10th
std. passed
Age –between 18 and 45 years of age
Should possess basic computer knowledge
3. Purpose
: To set up Internet/ Cyber cafes especially at rural and semi-
urban centres with potential for such a facility
4. Type of facilities
: Composite Loan
5. Quantum of Finance
: Rs.50000/-
6 Margin
: Rs.9000/-
7. Rate of Interest
: 0.75%below SBAR
8. Security:
- Primary
- Collateral
:
Hypothecation of the assets purchased from Bank finance
NIL Can be brought under CGTSI scheme
9 Processing fees Waived
10. Repayment
36 to 40 monthly instalments
155
11 Documentation
: As per SME documentation
12 Special features
: � N-Logue, a non profit organisation comprising of
specialists from IIT Chennai has designed the
"CHIRAAG" kiosk to be located at rural centres to
provide e-governance and has entered into agreements
with various agencies to enable these kiosks to provide
communication, education, information about
agriculture, health and other services.
The role of n-Logue is as under:-
� To identify, select and train the operators
� To provide logistic support and marketing
� Installation of equipment
� Provide internet connection
� Identifying usages and services
� To provide maintenance and insurance
� To interact with govt. departments to introduce and
enhance the scope of e-governance
� To monitor the assets and undertake marketing of
kiosk services
� To offer minimum buy back guarantee for the assets
� The scheme is presently introduced in Chennai,
Mumbai, Hyderabad, Bangalore and Ahmedabad
Circles.
� The total project will be around Rs.59000/-for purchase
of PC, monitor, CorDET wireless system, UPS, printer,
Internet registration, software, furniture, etc..
Product Highlights:
As a step towards building the technological gap between the urban haves and the rural have nots, nLogue, an NGO comprising of members of IIT, Chennai, have come together to provide technical and logistic assistance to rural entrepreneurs for setting up internet kiosks christened "CHIRAG" at rural centres. The Bank, on its part, has evolved this product to provide finance for this project for individual entrepreneurs in rural centres. This can also be taken up under the KVIC schemes which will provide a subsidy of 25% to 30%.
Generation of income for this project will be through providing basic internet services, tie-up with government departments for e-governance, for payment of statutory dues, for getting information regarding crop yields, market prices, agriculture inputs, educational facilities such as coaching for exams, obtaining results, marks lists, admission to professional college etc.
Marketing tips:
� Tie up with nLogue to market this product
156
� Identify trained youth especially in rural and semi-urban centres and refer them to
nLogue for further due diligence.
FAQs
� What are the margin requirements for this scheme?
The cost of the scheme has been estimated at Rs.59000/-. Of this, the maximum loan
permissible under this scheme is Rs.50000/- . The rest will be the margin which has to be
met either from own sources or from KVIC margin money scheme or any other scheme.
SME CREDIT PLUS
1. Target Group
: Existing SSI borrowers with excellent track record and have been
standard assets for the past two consecutive years and also new
borrowers.
2. Eligibility
: Units with CRA Rating of SB4 (old) & above or the equivalent
under the new CRA and / or standard assets for the past two
years
3. Purpose
: � For meeting bulk orders
� repairs to machinery
� Tax payments
� Any other contingency
4. Type of facilities : Clean Cash Credit
5. Quantum of Finance
: 20% of aggregate working capital limit subject to a maximum of
Rs.25lacs
6. Margin : Not applicable
7. Rate of Interest : At the rates applicable for working capital limits
157
8. Security:
- Primary
- Collateral
:
Nil
Existing collateral to be extended to cover this limit and
additional collateral to be obtained only if considered necessary
by the sanctioning authority
9. Processing fees : As applicable to SSI units
10. Repayment
: Each amount of withdrawal should be repaid within 2 months.
There should be a gap of 15 days between the last date of
repayment of outstandings and the next withdrawal.
11. Documentation : As applicable to clean cash credit.
12. Special features : � No cheque book to be issued
Product Highlights:
SME Credit Plus is a product designed to meet sudden and unforeseen expenditure
of SSI units with excellent track record. Eligible units can be sanctioned an additional
working capital limit of upto 20% of the aggregate fund based working capital limit by
way of clean cash credit. Additionally, the product can be extended to new borrowers
as a marketing tool to attract good borrowal units of other banks to our books.
158
Marketing Tips:
• This product can be effectively used to attract borrowers of other banks with
a good track record and potential for growth to our books.
• Borrowers of other Banks, especially those whose genuine needs are not
being adequately met by their banks are the most likely target group for
marketing of this product.
• The local District Industries Centre, Industry associations, trade bodies are
some of the sources for providing information regarding "good units in the
area".
STANDBY LINE OF CREDIT
FOR WORKING CAPITAL REQUIREMENTS
1. Target Group
: Existing SSI & C&I units and exporting units.
2 Eligibility
: Rated SB7 or its equivalent under the new CRA and above.
3 Purpose
: To meet genuine contingency needs arising out of bunching of
orders, delay in shipment / realisation of receivables, sudden
increase in raw material costs, mis -match in cash flows.
4 Type of facilities
: Working capital limit by way of cash credit, EPC, bills
discounting, against stocks, receivables, etc., as required.
159
5 Quantum of Finance
: Fund based limits and Non-fund based limits
15% of working capital facilities subject to a maximum of Rs.5
crs. The facility may be made available as fund based and/or non
fund based limits subject to the overall exposure being within
the SLC.(WC)
In the case of consortium advances, only our share in the
consortium should be reckoned for arriving at the quantum.
6 Margin
: As per the terms of the original limits
7 Rate of Interest
: One per cent higher than that applicable to the Cash Credit limit.
Discretion to waive the additional cost rests with the controller.
8 Security:
- Primary
- Collateral
:
Drawing power should be available to cover the SLC(WC) limit
Available collateral should be extended to cover SLC limit also.
9
Processing fees
NIL
10 Repayment
Generally, within 2 months at any one instance and can be
availed any number of times in a calendar year.
11 Documentation
: Documents should be obtained for the aggregate limits including
the SLC (WC)
In the case of consortium advances, the SLC(WC) should be
covered by a separate document and charge registered with the
ROC wherever applicable.
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12 Special features
: � The SLC(WC) should not be used for special type of facilities
such as EPCG,DPG, etc..
� The sanction should be by the authority having financial
powers for sanction of the aggregate limits including those
under SLC(WC)
� SLC(WC) should be calculated separately for peak and non
peak limits
� SLC(WC) limits, being contingent in nature will be out of the
consortium arrangement
� Sanction for the SLC(WC) should be obtained at the time of
sanction of regular limits for all regular borrowers and who
are likely to avail this facility during the year.
� SLC(WC) cannot be extended to units who have utilized SME
Credit Plus facility
� The release of the facility after due sanction should be
approved by the branch head on each occasion
Products Highlights:
This product has been introduced at the instance of RBI for enabling the exporters to avail additional
WC funds at short notice in times of urgent need. The maximum amount which can be given is 15%
of FB limits and NFB limits subject to a maximum of Rs.5crs While a similar product namely, SME
Credit plus is available for a contingent limit of Rs.25lacs only, this Stand by Line of Credit can be
given upto Rs.5crores.
Marketing tips:
� This product can be shown as an additional feature while marketing for SSI / C&I /
export business.
� Our existing units can be given this facility at the time of renewal itself, so that at the
time of need the unit can avail without loss of time.
GENERAL PURPOSE TERM LOAN FOR SSI SECTOR
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1. Target Group
: Existing SSI borrowers with CRA rating of SB3 and above
2 Eligibility
: � Should have earned profits in each of the preceding 3
years
� The unit should not have a history of default
� The unit should be CRA rated unit with a minimum limit
of Rs.25 lacs (as far as possible).
�
3 Purpose
: Any general commercial purpose such as shoring up NWC,
substitution of high cost debt, R&D, quality upgradation for ISO
certification, etc.
4 Type of facilities
: Term Loan
5 Quantum of Finance
: Maximum of Rs.50lacs
6 Margin
: Minimum of 25% for acquisition of assets, i.e., quantum of loan
should be restricted to 75% of project cost.
7 Rate of Interest
: As per CRA rating
8 Security:
- Primary
- Collateral
:
Extension of Hypothecation charge over current and fixed
assets
� Extension of charge over existing collateral
� Obtention of additional collateral by way of tangible
security to be explored
� Personal guarantees of proprietor/ partners / promoters
to be invariably obtained
9 Processing fees As applicable to SSI units
10 Repayment In monthly /quarterly instalments normally in 3 years,
162
extendable upto 5 years in deserving cases.
11 Documentation
: Specially designed document on the lines of the Composite Loan
Agreement
12 Special features
: � Term Loan to be disbursed in line with the approved
purpose
Loans , deposits, from friends and relatives can be treated as
quasi-equity to arrive at TNW subject to undertaking from them
that the amounts will not be withdrawn during the currency of
the loan.
Product Highlights:
This product is similar to the Corporate Loan which has recently been extended for
non- corporate borrowers. Our existing SB3 rated units which require funds for any
purpose connected with the running of the unit can be offered this product provided
the unit has been making profits for the last 3 years and is brought under CRA rating
exercise. The maximum amount of loan which can be sanctioned is Rs.50lacs
repayable in 3 to 5 years.
Marketing Tips:
The existing SB3 rated SSI customers are the target group. Generally, the SSI units
tend to borrow from private financiers to tide over their immediate liquidity problems
as availing this amount from the Bank ,even if eligible, would be time consuming.
Hence, it would be in the interest of the Bank to advise such borrowers to replace
their high cost debt from other sources with this loan at considerably lower cost to
ensure continued profits for the unit
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FAQs
� Can both Corporate Loan and this loan be given to the same unit?
No. Depending on which product is more suitable, any one of these loans can
be given.
OPEN TERM LOAN
Manufacturing Sector
12. Target Group
: SMEs in Manufacturing sector
13. Eligibility
: Existing or new corporate or non – corporate customers in SME
– manufacturing sector with credit ratings of SB7/SBTL7 and
above.
Units with SB10/SBTL10 can be considered selectively with
administrative approval of CGM( Circle)
Non customers also can be considered subject o fulfillment of
take – over norms and after due obtention of opinion reports
from their existing bankers.
Current Ratio and TOL /TNW should at acceptable levels
DSCR should be at least 1.75
14. Purpose
: Any genuine commercial purpose such as
� expansion / modernisation
� substitution of high cost debt of other banks / FIs
� Upgradation of technology
� Energy conservation systems
� Acquisition of software, hardware, consumables, tools, jigs,
164
fixtures, etc.
� ISO and other such certifications
� Visits abroad for acquiring technology, finalizing deals,
participation in fairs, market promotion, etc.
15. Type of facilities : Term Loans
16. Quantum of Finance
: Maximum Rs.250lacs
For amounts more than this, prior administrative approval from
the CGM(Circle) is to be obtained and the sanction would have
to be accorded by CCC – 1
17. Margin : 10% uniformly
18. Rate of Interest
: As per the credit rating of the borrower linked to SBAR on
floating rate basis
19. Security:
- Primary
- Collateral
: � Hypothecation of the machinery proposed to be
purchased out of the Term loan
� Extension of charge over current assets, fixed
Assets and other existing collateral
� Obtention of additional collateral should be explored
� In all cases, personal guarantees of the promoters of the unit
have to be invariably obtained.
In case of corporate borrowers, pledge of promoters
equity should be explored
20. Processing fees
As applicable to the unit for term loans
21. Repayment
: Generally not to exceed 3 years. May be extended upto 5 years
selectively if considered necessary.
22. Documentation
: Usual Term Loan Agreement for the TL limit to be obtained
upfront and supported by exchange of suitable letters at the
time of each disbursement
23.
Special features
� This is a unique facility of a pre-sanctioned term loan limit
with the option of multiple disbursements for multiple
purposes to be sanctioned along with the working capital
limits.
� This facility is to be made available at our erstwhile
165
commercial network branches, industrial estate branches,
SSI branches, which are headed by CMs and such other
branches identified for the purpose by the
CGM(Circle)/GM(Network)
� Other branches may get such loans processed and
sanctioned by SECC/CPCs irrespective of the amount.
� Borrowers can utilize the facility on multiple occasions as per
their needs.
� Each disbursal can be made by the branch manger without
reference to the sanctioning authority
� The repayment for each term loan is to be calculated by
reference to the date of the first drawdown
� Each disbursal should be supported by an exchange of
letters between the borrower and the Bank.
� The sanction is valid for 12 months only from the date of
sanction and any unutilized portion will lapse after 12
months.
� Each term loan has to be treated as an individual TL for
accounting purposes.
� The discretionary powers are as applicable to term loans.
� There is no need to refer these proposals to the Consultancy
cells for techno-economic viability study.
Product Highlights:
This is a unique facility, the first of its kind aimed at our existing units, both our
customers, especially those who are rated high as well as those banking elsewhere to
facilitate them to negotiate for acquisition of assets, etc. with the comfort of a pre-
sanctioned term loan limit. There is no need for routine references to the
Consultancy cells for TEV study for this product.
OPEN TERM LOAN
For Services Sector
24. Target Group
: Hotels, Hospitals, Educational Institutions & Fleet Operators
25. Eligibility : Existing or new corporate or non – corporate customers in SME
– manufacturing sector with credit ratings of SB7/SBTL7 AND
166
ABOVE.
Units with SB10/SBTL10 can be considered selectively with
administrative approval of CGM( Circle)
Non customers also can be considered subject o fulfillment of
take – over norms and after due obtention of opinion reports
from their existing bankers.
Current Ratio and TOL /TNW should at acceptable levels
DSCR should be at least 1.75
26. Purpose
: Any genuine commercial purpose such as
� expansion / modernisation
� substitution of high cost debt of other banks / FIs
� Upgradation of technology
� Energy conservation systems
� Acquisition of software, hardware, consumables, tools, jigs,
fixtures, etc.
� ISO and other such certifications
� Visits abroad for acquiring technology, finalizing deals,
participation in fairs, market promotion, etc.
27. Type of facilities : Term Loans
28. Quantum of Finance
: Maximum Rs.100lacs
For amounts more than this, prior administrative approval fro
the CGM(Circle) is to be obtained and the sanction would have
to be accorded by CCC – 1
29. Margin : 10% uniformly
30. Rate of Interest
: As per the credit rating of the borrower linked to SBAR on
floating rate basis
31. Security:
- Primary
- Collateral
: � Hypothecation of the machinery proposed to be
purchased out of the Term loan
� Extension of charge over current assets, fixed
Assets and other existing collateral
� Obtention of additional collateral should be explored
� In all cases, personal guarantees of the promoters of the unit
have to be invariably obtained.
In case of corporate borrowers, pledge of promoters
equity should be explored
167
32. Processing fees As applicable to the unit for term loans
33. Repayment
: Generally not to exceed 3 years. May be extended upto 5 years
selectively if considered necessary.
34. Documentation
: Usual Term Loan Agreement for the TL limit to be obtained
upfront and supported by exchange of suitable letters at the
time of each disbursement
35.
Special features
� This is a unique facility of a pre-sanctioned term loan limit
with the option of multiple disbursements for multiple
purposes to be sanctioned along with the working capital
limits.
� This facility is to be made available at our erstwhile
commercial network branches, industrial estate branches,
SSI branches, which are headed by CMs and such other
branches identified for the purpose by the
CGM(Circle)/GM(Network)
� Other branches may get such loans processed and
sanctioned by SECC/CPCs irrespective of the amount.
� Borrowers can utilize the facility on multiple occasions as per
their needs.
� Each disbursal can be made by the branch manger without
reference to the sanctioning authority
� The repayment for each term loan is to be calculated by
reference to the date of the first drawdown
� Each disbursal should be supported by an exchange of
letters between the borrower and the Bank.
� The sanction is valid for 12 months only from the date of
sanction and any unutilized portion will lapse after 12
months.
� Each term loan has to be treated as an individual TL for
accounting purposes.
� The discretionary powers are as applicable to term loans as
usual.
� There is no need to refer these proposals to the Consultancy
cells for techno-economic viability study.
Product Highlights:
This is a unique facility, the first of its kind aimed at our existing units, both our
customers, especially those who are rated high as well as those banking elsewhere to
facilitate them to negotiate for acquisition of assets, etc. with the comfort of a pre-
168
sanctioned term loan limit. There is no need for routine references to the
Consultancy cells for TEV study for this product.
DAL MILLS PLUS
1. Target Group
: Dal mills
2. Eligibility
: � Profit making existing units with CRA rating of SB4 and above
�
3. Purpose
: � Acquisition of machinery / factory buildingfor modernization
� Working Capital needs
�
4. Type of facilities
: Term Loan / Cash Credit / LCs / BGs / SME Credit Plus
5. Quantum of Finance
: TL – no upper ceiling , CC – As per Nayak Committee norms for
limit upto Rs.5crores
6. Margin : Cash credit – 25%
7. Rate of Interest
:
Finer rates of interest are being offered for Dal Mills Plus as per
circulars issued from time to time
8. Security:
- Primary
- Collateral
:
- Hypothecation of assets created out of Bank’s finance
- Upto Rs.5 lacs – NIL
- Above Rs.5lacs – EM of property / tangible
security for not less than 75% of the loan
amount
169
9. Processing fees As per SSI norms
10. Repayment
: TL to be repaid in 5 to 7 years excluding a maximum moratorium
period of 12 months
11. Documentation : As applicable to SSI units
12. Special features
: � A simplified CRA rating system has been designed to suit the
special characteristics of Dal Mills
� Loan has to be sanctioned to deserving units within 15 days
of receipt of completed applications
� A special appraisal form has been designed to assess the
credit needs of Dal mills
170
Product Highlights:
This is a product to help in proper assessment of the credit needs of the Dal mills which although a
traditional activity has assumed a more complex format in view of the liberalization of import and
modernization of the processing of various kinds of pulses. The simplified CRA model will help in
taking into account the market practices and is customer friendly which will help in not only
retaining our existing customers and meeting their credit and other banking needs more
comprehensively but also in attracting new connections to our books subject to fulfillment of take
over norms.
Marketing Tips:
� Contact local Dal Mill Owners Association to obtain a list of all dal mills in the area
� Arrange a meeting of all dal mill owners to explain this exclusive product designed for them by
the Bank.
FAQs
� Can combined dal and flour mills be financed under this product?
Yes provided the books are maintained to reflect the dals and the flour items
Separately
DAL MILLS PLUS - CREDIT RATING SYSTEM
S.No. Parameters Score
1. Current Ratio >=1.15
>=1.13 <1.15
>=1.10 <1.13
>=1.05 <1.10
<1.05
15
12
8
5
0
2. TOL/TNW Ratio <=2.50
>=2.50 <3.50
>=3.50 <5.00
>=5.00 <6.00
>6.01
10
8
6
4
2
3. Gross average DSCR for all loans
inclusive of the proposed term loan
>=2
<2.00 >=1.75
10
7
171
<1.75 >=1.50
<1.50
5
2
4. Interest and instalment obligation of cash
credit and term loan(s) � Timely repayment on due date
� Delayed payment upto 30 days
� Over 30 days
10
5
0
5. Total sales : Inventory + sundry debtors >= 4 times
>=3times <4 times
>=2 times <3 times
>2 times
10
8
4
2
6. Submission of stock statements, balance
sheets, renewal data � Timely submission
� One month delay
� Irregular in submission
5
3
1
7. Achievement of projected sales >=85%
< 75% >=50%
<50% >=25%
<25%
5
4
3
0
8. Supported by tangible collateral security
including 2nd
change on fixed assets
Security coverage to total loan
>=100%
>=50% <100%
>=25% <50%
<=25%
10
8
4
2
9. Operational experience in cash credit � Liability not exceeding DP / Limit
� Liability exceeded limit Occasionally. Excess drawal adjusted in time.
� Liability exceeded frequently and adjusted with some delay.
10
5
3
10. Compliance with terms and conditions of
sanction � Complied with promptly
� Complied with delay
� Not complied with
5
3
0
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11. Age of relationship with the Bank
(Banking with us since….)
Above 5 years
>3 years <5 years
> 1year <3 years
5
4
2
12. Age of the firm / Company# Above 5 years
>3 years <5 years
>1 year <3 years
5
4
2
#Remarks a )Gross average DSCR for all loans (Sr. No. 3) will not be applicable in case the unit is not
seeking term assistance. In such cases, the total score need to be normalized to 100.
b) The higher age of the firm / company will reduce the chances of default. Consistent
downfall in performance inclusive of profitability parameters should fetch a firm / company
a score of 2 irrespective of the age of the firm/company.
Commercial Advances IRAC
SSI Segment : Rice Mills Credit Rating
Unit : Date of last renewal
1. Proposal for :
(Please tick)
Renewal of working capital limits at the existing level
Renewal of working capital limits with enhancement
Sanction of working Capital limits – New
Sanctioning Authority (CCC-I / CCC-II MECC / SECC / NWCC / AGM / CM / BM)
2. Total indebtedness :
(Rs. Lakhs)
Nature of Facility Existing Proposed
Fund Based
Cash Credit (MT)
173
Cash Credit (Hypothecation)
Cash Credit (Outward Bills – Clean)
Medium Term Loan
Total (A)
Non Fund Based
Letters of credit
Bank Guarantees
Total (B)
Grand Total (A+B)
3. Borrower
a) Name :
b) Factory at :
c) Constitution : Partnership
d) Date of Partnership deed :
e) Name & Worth of Partners :
S.No. Name Worth in Rs. Lakhs
1.
2.
3.
4.
5.
6.
7.
174
8.
9.
10.
f) Products manufactured / processed :
g) Date of commencement of :
Commercial production
h) Dealing with SBI since :
i) Whether the firm has power to borrow : Yes / No.
j) Names of authorized signatories
(If applicant is other than a partnership, please alter the columns suitably)
4. Brief History :
5. Production facilities : As per Annexure – I
6. Key Financial Indicators :
Actuals Estimates Projections
31.3. 31.3 31.3. 31.3
Sales
Rice - levy (FCI)
Quantity (Quintals)
Value
Rice - levy (APSCSC)
Quantity (Quintals)
175
Value
Rice - Non Levy
Quantity (Quintals)
Value
Brokens
Quantity (Quintals)
Value
Bran
Quantity (Quintals)
Value
Husk
PURCHASES – Quality – wise
Quantity (Quantals)
Value
Gross Profit
Net Profit
Tangible Net Worth
Current Assets
Current Liabilities
Net Working Capital
Current Ratio
TOL / TNW
Current Year Sales from 1st April to 30
th
September
7. Comments on the financial position / indicators :
176
Sales
Net Profit
Annex - I Production facilities :
Owned Leased
Capacity of Rice Mills (Tons per hours)
Number of shifts per day
Total No. of working days
Total Annual Capacity
177
For the Leased Capacities :
Name of the Owner :
Date of Lease deed :
Valid up to :
Whether the lease rights : Yes / No.
Assignable
Clauses detrimental to the : Bank’s Interest if any
II. Storage Capacity :
Milling Hall :
Open Yard :
Godown :
Owned :
Rented :
Total Storage capacity :
For Rented Godowns
Whether rent letter obtained : Yes / No.
Assessed Quantity of
III. Production (Projected for the current year)
Levy Non Levy Total
Paddy proposed to be milled (Quintals)
Production (in Quintals)
Rice
Brokens
Bran
Husk
178
Total
IV. Sales (Projected for the Current Year)
Levy Non Levy Total
Rice
Brokens
Bran
Husk
Total
Monthly Turnover (in Rs. Lacs) for the last twelve monthas)
Month 1 2 3 4 5 6 7 8 9 10 11 12
Turnover
V. Utilities :
Required Available
Power
Transco
Generator
Water
Labour
179
VI. Licenses / Statutory Dues / Litigation
SSI Registration Number
Position regarding Statutory dues Assessed upto Assessed Value
Income Tax
Sales Tax
Any Pending suits against the unit by the
Government Departments / Corporations
Yes / No.
If “Yes”, furnish the particulars on a separate sheet)
Whether all the required licenses are obtained
and kept on Record
Yes / No.
If “Yes”, furnish the particulars on a separate sheet)
Associate
Concerns if any
and the position of
accounts
I II III
Unit’s Name
Date of Sanction
Limit (Rs. Lakhs)
D.P. (Rs. Lakhs)
O.S. (Rs. Lakhs)
IRAC Status
180
VII. Commercial Data
Before Last Year Last Year Current Year (Proj.)
Levy Quota allotted* (Quintals)
Levy sales (Quintals)
Levy Sales (Value)
Non-Levy sales (including brokens,
bran and husk etc.) value
Maximum Drawings at any one time
Interest Income*
Other Income
* Expected, If order is not yet received
(Enclose copy of the present order issue by the competent authority. If the present one is not yet
received, enclose previous year’s order)
Overall Risk Level : Score out of 100
Credit Rating Awarded :
Asst. / Deputy Manager (Appraiser) Branch / Chief Manager (Assessor)
ARTHIAS PLUS
1. Target Group
: Commission agents (Arthias) of agricultural produce who are
registered with the Market Committee and possess a license
issued by the District Food and Supplies Department to sell the
produce of the farmers.
181
2 Eligibility
: � Commission agents enjoying good reputation and who
have been in this business for at least the past 3 years
and holding a valid license to carry on his activity.
� Commission agents having receivables from farmers
only.
3 Purpose
: To finance commission agents against receivables from farmers.
4 Type of facilities
: Cash Credit ( Hypothecation of book debts not more than 6
months old)
5 Quantum of Finance
: Maximum Rs.25lacs
6 Margin
: 40%
7 Rate of Interest
: AGL/SBF Segment
0.5% below SBAR for limits below Rs.2lacs
At SBAR for limits of Rs 2lacs and upto Rs.10lacs
Under C&I segment (Above Rs.10lacs & upto Rs.25lacs)
1.10% to 2.50% above SBAR based on CRA Rating
8 Security:
- Primary
- Collateral
: Hypothecation of receivables and movable assets if any
EM of non-agricultural property, either residential or
commercial belonging to the borrower or guarantor for 1.5
times the loan amount.
9 Processing fees As applicable to the segment
182
10 Repayment
To be liquidated within 6 months and to be renewed annually
11 Documentation
: As per simplified SME documentation
12 Special features
: � A statement of eligible receivables should be obtained
from the borrower and verified with books of account or
audited financial statements.
� At the end of every cropping and marketing season, the
borrower should liquidate the outstandings fully
� The limit should thereafter be subject to review/
renewal as per trade advance norms.
Product Highlights:
Commission agents have established themselves as a strong link between the farmers and the markets for their produce. These commission agents provide finance for the farmers for their cultivation needs and act as agents to sell their crop at harvest time. They charge commission of 1 to 2% which is recovered from the buyer of the produce. These agents are registered with market committees. The records of produce brought by the farmer and auctioned in the market yard are maintained by the marketing board. Our product "Arthias Plus" provides finance to these commission agents otherwise known as "arthias" against their receivables of not more than 6 months old, from farmers only. The credit is extended by way of cash credit (hypothecation of book debts and assets) upto a maximum amount of Rs.25 lacs.
This is to be treated as indirect finance to agriculture.
Marketing Tips:
183
• The marketing committees will be able to provide details of registered
"arthias" (commission agents) who should be contacted personally to sell this
product.
This is a valuable tool to increase bank credit to rural areas and will greatly assist in
marketing of agricultural produce.
FAQs
� Can unregistered Arthias be financed?
No. Only those commission agents who are registered with the market committees are
eligible for finance under this scheme.
� What about those States where this system of registration is not in vogue?
In such cases, this scheme is not applicable. Instead, any other scheme such
as advance against mortgage of immovable property can be considered on
merits.
WORKING CAPITAL FINANCE TO T&S SECTOR
1. Target Group
: .Retail and wholesale traders in agricultural and industrial
commodities, Dealers in consumer durables, consumer goods,
vehicles, showrooms, etc.
184
2 Eligibility
: Units in C&I segment established with profits at least in the
preceding 3 years with CRA rating of SB4 and above
3 Purpose
: Working capital requirements
4 Type of facilities
: Cash credit limit with a sub-limit for LCs if required
5 Quantum of Finance
: 15% of projected annual turnover which should not be more
than 25 % of the turnover in the previous year subject to a
maximum of Rs.5 crores.
6 Margin
: 25%
7 Rate of Interest
: As per credit rating. A concession of 0.50% may be offered for
units with at least 75% collateral coverage
8 Security:
- Primary
- Collateral
:
Hypothecation of stocks and receivables
Collateral security of at least 50% is to be prescribed out of
which at least 33% of the limit should be by way of mortgage of
immovable property. The stipulation regarding immovable
property can be reduced to 25% in exceptional cases with the
administrative approval of CCC-II.
9 Processing fees As applicable to C&I units
10 Repayment On demand
185
11 Documentation
: As per simplified SME documentation
12 Special features
: In case the proposal does not fit into the turnover based model
of credit assessment, the traditional method of projected
balance sheet method may be adopted.
Product highlights:
As a measure to improve credit flow to the Trade & Services sector, a financial model based on the
annual turnover rather than on inventory build up has been designed . As per this model , a credit
limit equal to 15 % of the projected annual turnover can be fixed subject to the projection being not
more than 25% increase in the actual turnover of the immediately preceding year. A margin of 25 %
has to be maintained and the drawing power has to be regulated based on the stock statements.
Marketing tips:
� Traders, both wholesale and retail, are the target group.
� The rates of interest charged by the Bank are much lower than the rates at which most
of the traders avail finance from the private financiers or from the suppliers.
� The collateral to be taken is only 33% if the applicant is an established profit making
enterprise with CRA rating of SB4.
� Interest concessions can be offered if the collateral offered is more than 75% of the loan
amount.
FAQs
� Can the borrower be granted higher limits than what is arrived at under the Turnover
method? � Yes. In such cases the assessment has to be made under the Projected Balance Sheet
method.
186
FLEXI LOAN FOR TRADE AND SERVICES
1. Target Group
: 8. Wholesale and retail traders in agricultural or industrial
commodities
9. Distributors and stockists of industrial products ,
consumer durables, consumables , etc.
10. Export / import intermediaries
11. Tourism related facilities-Hotels/resorts/travel agents,
etc.
12. Large transport operators of passenger buses/fleet
owners
13. Construction, transport & supply contractors,
Hospitals, nursing homes, clinical labs, etc.,
2 Eligibility
: Borrowers with CRA rating of SB10 or SBTL10 and above only are
eligible and should have earned cash profits in each of the
preceding 3 years and net profit in the last year. Only
established traders with proven record of profitability are
eligible.
3 Purpose
: The loan can be considered for any general purpose such as
� Holding of stocks/book-debts
� Acquisition of land and building
� Construction/renovation of office/showroom
� Purchase of vehicles, equipment, machinery
� Shoring up of net working capital
4 Type of facilities
: Term loan
5 Quantum of Finance
: Rs.5 lacs to Rs.100 lacs. In the case of extending this term loan
for working capital purposes, a limit of upto 15% of the assessed
WC limits can be considered for meeting contingencies , subject
to availability of drawing power. Minimum DSCR to be 1.50.CRA
–Trade model to be used for limits above Rs.25 lacs.
6 Margin
: Minimum 25% of the expenditure
Rate of Interest
: Linked to CRA rating for limits above Rs. 25 lacs. For others, SBF
rates are applicable.
187
8 Security:
- Primary
- Collateral
: Hypothecation of current assets and EM of land and building if
acquired from Bank finance
1. Tangible security by way of immovable property, TDRs,
NSCs, etc for a minimum of 35% of the loan for those with
a satisfactory track record of 3 years. For others, minimum
collateral should be 50% .
2. Personal guarantees of promoters/partners/ proprietor
9. Processing fees As applicable to C&I units
10 Repayment
In 3 to 5 years This can be extended upto 8 years in deserving
cases.
11 Documentation
: As per simplified SME documentation
12 Special features
: � RBI guidelines on selective credit control will
apply
� Audited Balance Sheet to be obtained as per
extant instructions
� Exposures under Multiple Banking Arrangement
may be explored selectively to facilitate take-over
of quality assets.
Product Highlights:
This is a term loan facility repayable in 3 to 5 years extendable upto 8 years, designed
taking into account the special requirements of the trade and services sector. The
eligible activities for this product are:
1) Wholesale and retail traders & distributors of agricultural & industrial
commodities
2) Departmental stores and supermarkets
3) Export/ import intermediaries
4) Large transport operators of passenger buses and goods.
5) Construction, transport, supply, public utility / maintenance contractors
6) Tourism related facilities – Hotel / travel agencies
7) Hospitals, nursing homes, clinical labs etc.
188
Borrowers with CRA rating of SB10 or SBTL10 under CRA-Trade model are eligible for
this product. Gross DSCR should be minimum 1.50 and TOL/TNW not beyond 4and
total long terms liabilities to equity should not be more than 2:1 and current ratio
should be at least 1. The maximum amount of TL which can be granted under this
scheme is Rs.100 lacs.
Marketing Tips:
� Almost anyone involved in trade or service can be offered this facility which can be used for any general purpose connected with their line of activity.
� All small and medium sizes enterprise in the area of operation can be
targeted for this product.
SBI SHOPPE
1. Target Group
: Present and prospective owners of shops/ offices/ show-rooms/
training centres/ service centres/ garages/ offices for Chartered
Accountants / Consultants
2. Eligibility
: Individuals /firms / partnerships / trusts / franchisees
3. Purpose
: � Purchase of new / old shops/ establishments / offices /
dealer's showroom etc.
� Repairs / renovation / modernisation
� Furniture / fixtures / electrical fittings /accessories for
the shop/office etc.
4. Type of facilities
: Term Loan
5. Quantum of Finance : Maximum of Rs.20 lacs
189
6. Margin
: 25% and 40% for purchase of old premises
7. Rate of Interest
: As applicable to SIB TLs below Rs.25 lacs
8. Security:
- Primary
- Collateral
:
Hyp. / pledge / mortgage / assignment of the assets purchased
out of Bank's finance
9. Processing fees As applicable to SSI / SBF units
10. Repayment
: 3 to 7 years excluding a maximum moratorium period of 6
months
11. Documentation
: As per simplified SME documentation
12. Special features
: � No Objection Certificate and No Lien Letter to be
invariably obtained from the owner-lessor of the
property in the case of rented property
� Repayment period should be well within the lease
period in the case of rented property.
� Opening of SB / Current Account is mandatory
� DSCR to be minimum 1.75
� Property on hire purchase/ lease from govt.
departments /PSUs should not be financed
190
Product Highlights:
This is a unique product aimed at the trade sector for purchase /modernisation/ expansion / upgradation of shops dealer/show rooms, franchisees, repair centres / Garages / buildings for professionals etc. upto Rs.20 lacs by way of a term loan repayable on easy terms.
Marketing Tips:
• Shopping complexes / malls are ready source of business for this product.
• Traditional shopping / business areas in towns and cities can be a source for
marketing this product for renovation and facelifting.
• Takeover of similar loans extended by other banks can be considered subject
to fulfilment of take over terms.
FAQs
� Can this loan be given if the shop premises is owned by a close relative of the owner of
the shop who has applied for the loan?
Yes. Often the premises is in the name of the father or the wife of the applicant. The
loan can be given in such circumstances also subject to obtention of usual no objection/
no lien letter from the owner of the property.
� Can this loan be extended to travel agents for setting up an office?
Yes. This facility can be extended to those engaged in services such as travel agencies,
caterers, hotels, eateries, beauty salons, etc.
SBI SHOPPE PLUS
191
13. Target Group
: Present and prospective owners of shops/ offices/ show-rooms/
training centres/ service centres/ garages/ offices for Chartered
Accountants / Consultants
14. Eligibility
: Individuals over 21 years of age with a steady source of income
and possessing necessary approvals for construction of
proposed structure
15. Purpose
: This product is a combination of Housing Loan and SBI Shoppe.
The applicant is expected to first apply for a housing loan and on
completion of the house he becomes eligible for a term loan on
the lines of SBI Shoppe for setting up an office / shop for
purchase of furniture, equipment , etc.
16. Type of facilities
: 2 Term Loans
17. Quantum of Finance
: 1st
term loan as per housing loan scheme and second term loan
for 75% of cost of setting up office / shop
18. Margin
: 1st term loan - as per housing loan
2nd
term loan - as per SBI Shoppe – 25%
19. Rate of Interest
: 1st term loan - as per housing loan
2nd
term loan – as per SBI Shoppe less 0.25% if eligible under SBI
Credit Khazana
20. Security:
- Primary
- Collateral
: Hypothecation of the assets purchased out of Bank's finance and
EM of land building for 2nd
and 1st term loans respectively
Extension of EM for 2nd
term loan
192
21. Processing fees As per housing loan for 1st term loan
As applicable to SSI / SBF units for 2nd
term loan
22. Repayment
: As per housing loan for 1st
term loan
As applicable to SBI Shoppe for 2nd
term loan
23. Documentation
: As per housing loan for 1st
term loan
As applicable to SBI Shoppe for 2nd
term loan
24. Special features
: � This is a combination of housing loan scheme and SBI
Shoppe for the use of professionals such as Chartered
Accountants lawyers, consultants,
Product Highlights:
This is a unique product aimed at the services sector for purchase of office – cum - residence for professionals etc. Credit can extended by way of a term loans repayable on easy terms.
Marketing Tips:
� The local chapter of the Institute of Chartered Accountants of India would
provide a list of chartered accountants who are in practice. They could be
contacted individually or by holding a seminar or meeting for them to
explain the features of this unique scheme which also has substantial tax
benefits.
EXPRESS VENDOR DISCOUNT SCHEME
193
1. Target Group
: Vendors of reputed Corporates and industry majors
2 Eligibility
: COCC I will accord administrative clearance for selection of
industry majors(IMs) whose vendors become eligible for this
facility
3 Purpose
: To finance specific receivables against goods / services supplied
to the identified industry major
4 Type of facilities
: EVDS limit for 1 year renewable on case to case basis
5 Quantum of Finance
: The aggregate of the EVDS limits for an IM will be given by the
COCC I. The individual limits for the vendors will be given by
CAG
The period of credit will be stipulated by the COCC I .
6 Margin
: Generally nil
7 Rate of Interest
: Will be approved by the COCC I
8 Security:
- Primary
- Collateral
: Generally unsecured.
9 Processing fees As applicable to C&I
10 Repayment
IM has to pay on due date of each receivable but Bank has
recourse to vendor in case of default by the IM
11 Documentation : Specially designed by the Law department
194
12 Special features
: � The advance is self – liquidating in nature
� As part of supply chain financing the Bank is
providing relief to the industry majors in better
management of their funds.
� The products have low risk profile
PRE –SHIPMENT EXPRESS VENDOR SCHEME
1. Target Group
: Vendors of reputed Corporates and industry majors
2 Eligibility
: COCC I will accord administrative clearance for selection of
industry majors(IMs) whose vendors become eligible for this
facility
3 Purpose
: To finance Working capital needs against purchase orders from
Industry Majors
4 Type of facilities
: EVDS limit for 1 year renewable on case to case basis
195
5 Quantum of Finance
: The aggregate of the EVDS limits for an IM will be given by the
COCC I. The individual limits for the vendors will be given by
CAG
The period of credit will be stipulated by the COCC I .
6 Margin
: Generally nil
7 Rate of Interest
: Will be approved by the COCC I
8 Security:
- Primary
- Collateral
:
Generally unsecured.
9 Processing fees As applicable to C&I
10 Repayment
IM has to pay on due date of each receivable but Bank has
recourse to vendor in case of default by the IM
11 Documentation
: Specially designed by the Law department
12 Special features
: � The advance is self – liquidating in nature
� As part of supply chain financing tne Bank is
providing relief to the industry majors in better
management of their funds.
� The products have low risk profile
196
FINANCE TO RESTAURANTS
Particulars Details
Target Group Owners of
� Restaurants
Eligibility � Individuals (proprietorships)
� Partnership firms
� Corporates Purpose � For purchase of Kitchen equipments
� For investment in Interior decoration
� For purchase of furniture and fixtures Nature of facility � Term loan or overdraft.
Tenure of Loan � Repayment period of up to 7 years when land and building
cost included in loan, otherwise 5 years.
Quantum of
finance
Investment in the Restaurant for the aforementioned purposes
less margin / promoters contribution which ever is lower.
Security
� Primary
� Collateral
Hypothecation / Pledge of the assets financed by the Bank
� Extension of charge over current assets, Fixed assets and other
existing collateral if any
� Obtaining additional tangible security such as immovable property,
bank deposits, etc. is to be explored wherever possible
� In all cases personal guarantees of proprietors/partners/promoters
to be invariably obtained
Margin 25%
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Insurance All the assets financed by the Bank and the collateral security is to be fully
insured as per extant instructions.
Rate of interest The interest rates on the scheme, for new restaurants and takeovers from
other Banks and financial institutions will be applicable as per the table
below, related to the score obtained by an application in the rating through
the credit evaluation matrix.
New cases
Score Rate of interest
> 75 SBAR (10.25%)
Between 65 and 75 SBAR + 1% (11.25%)
Between 50 and 65 SBAR + 2% (12.25%)
< 50 Not eligible
Takeover cases
Score Rate of interest
> 75 SBAR (10.25%)
Between 60 and 75 SBAR + 1% (11.25%)
< 60 Not eligible
Current SBAR – 12.25%
Inspection Monthly by the Field Officer and quarterly by the Divisional Manager
/Branch Manager as per extant instructions for trade advances.
Discretionary
powers
� In cases of loan of more than Rs.25 lacs for a new restaurant, the authority one level higher than the sanctioning authority will have the power
to reduce the interest rate by up to a maximum of 1.00% based on competition.
� Similarly, in takeover cases, of loans more than Rs.25 lacs the
authority one level higher than the sanctioning authority will have the
power to reduce the interest rate by up to a maximum of 1.00% based
on competition.
198
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3:2
8:2
4 P
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Prin
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1/3
1/2
005
11:4
0:0
6 A
M
CREDIT EVALUATION GRID FOR NEW RESTAURANTS
Category (weight) Factors
A B C
Location (20%)
Novelty (10%)
• Accessibility
• Purchasing power of population
• Competitive intensity
• Novelty value and sustainability over long
term
10 5 0
5 2 0
5 2 0
10 5 0
Owner (20%)
• Restaurant industry experience
• Proportion of equity
10 5 0
10 5 0
Collateral (20%) • Loan to collateral ratio 20 10 0
199
Repayment capability (20%)
• Debt coverage
Brand image
10 5 0
20 10 0
Brand Image
10%
200
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8:2
4 P
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Prin
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1/3
1/2
005
11:4
0:0
6 A
M
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (1/3)
Category Condition Points
Location
• Accessibility* • Easily accessible / located on ground floor along main road 5
• Requires effort to access (far from population, inside a 2
building, commercial complex etc.) 0
• Difficult to access / located in interior or side lane
• Purchasing power of target segment
• Competitive intensity
• Affordable for target segment on normal occasions 5
• Affordable for target segment only on special occasions 2
• Beyond the purchasing power of target segment 0
• Low – Few restaurants for target segment 5
• Medium – Limited number of restaurants for target segment 2
• High – Large number of restaurants for target segment 0
Novelty
• Novelty value
and sustainability over
long term
• Novel concept that is sustainable over long term 10
• Concept novel but can be easily copied 5
• ‘Me too’ – no novelty in the concept 0
201
* Restaurants with novelty value/brand and easy accessibility can attract customer from all across the city. Me too
restaurants will mainly attract customers from nearby localities and location on main road is a great advantage
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (2/3)
Category Condition Points
Owner
• Restaurant
industry
experience
(as owner or key
person)
• >= 3 years 10
• >= 1 years 5
• < 1 years 0
• Proportion of personal equity
• Debt/equity <= 1 10
• Debt/equity <= 1.5 5
• Debt/equity > 1.5 0
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (3/3)
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:28
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P
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/31/2
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5 1
1:4
0:0
6 A
M
Category Condition Points
Collateral
• Loan to collateral ratio
• >= 50% 20
• >= 25% 10
• < 25% and >10%* 0
Repayment
capability
• Debt service coverage
(compare sales estimate
with sales of similar restaurants in region)
• >= 2 20
• >= 1.5 10
• < 1.5 0
Brand
• Brand image
• Reputed chain of restaurants in region 10
• At least one well known restaurant 5
• Unknown 0
* Minimum collateral is 10% below which proposal will be rejected
203
204
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2/3/2
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5 3:2
8:2
4 P
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1/3
1/2
00
5 1
1:40:0
6 A
M
CREDIT EVALUATION GRID FOR RESTAURANTS – TAKEOVER CASES
Score
Category (weight) Factors
A B C
Location (10%)
• Accessibility
• Competitive intensity
5 2 0
5 2 0
Owner (20%)
• Restaurant industry experience
• Proportion of equity
10 5 0
10 5 0
Collateral (20%) • Loan to collateral ratio 20 10 0
Repayment capability (10%)
Track record
(20%)
• Debt coverage
• Track record of payment of loans
10 5 0
20 0
Profitability of
operations (10%) • Profitability 10 5 0
205
W ork
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Dra
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odifie
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/3/2
005
3:2
8:2
4 P
M
Prin
ted
1/3
1/2
005
11:4
0:0
6 A
M
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID – TAKEOVER CASES (1/3)
Category Condition Points
Location
• Accessibility* • Easily accessible / located on ground floor along main road 5
• Requires effort to access (far from population, inside a 2
building, commercial complex etc.) 0
• Difficult to access / located in interior or side lane
206
• Competitive
intensity
Profitability of
operations
• Low – Few restaurants for target segment 5
• Medium – Limited number of restaurants for target segment 2
• High – Large number of restaurants for target segment
0
• Profitability** • Positive profit 10
• Loss making 0
* Restaurants with novelty value/brand and easy accessibility can attract customer from all across the city. Me too
restaurants will mainly attract customers from nearby localities and location on main road is a great advantage
** If restaurant has been in existence for < 1 year projections based on available sales figures may be used to assess
profitability 6
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID – TAKEOVER CASES (2/3)
Category Condition Points
Owner
207
• Restaurant industry experience
(as owner or key person)
208
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8:2
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1/3
1/2
005
11:4
0:0
6 A
M
W o
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2/3
/200
5 3
:28:2
4 P
M
Prin
ted
1/3
1/2
005
11:4
0:0
6 A
M
• >= 3 years 10
• >= 1 years 5
• < 1 years 0
• Proportion of personal equity
• Debt/equity <= 1 10
• Debt/equity <= 1.5 5
• Debt/equity > 1.5 0
DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID – TAKEOVER CASES (3/3)
Category Condition Points
Collateral
• Loan to collateral ratio
• >= 50% 20
• >= 25% 10
• < 25% and >10%* 0
Repayment
capability
• Debt service coverage
(compare sales estimate
with sales of similar restaurants in region)
209
• >= 2 10
• >= 1.5 5
• < 1.5 0
Track record of
repayment
• Term loan repayment history
• Satisfactory track record of repayment of term loans 30
obligation
• Default on repayment of term loan obligation 0
* Minimum collateral is
10% below which proposal
will be rejected
210
Application cum Interview form
State Bank of India
Branch
Application cum interview form for trade and services
(Restaurants)
1. Name of the Unit
2. Address of the Unit
Phone No.
Fax No.
3 Address of Reg. Office in case of Corporates
4 Trade / Services in
5 Year of commencement of business
6 Experience in the line of activity
7 Constitution
8 Details of reconstitution in the past three years
9 Details of Proprietor / Partners / Directors
Name &
Qualificatio
n
Age PAN Residential
Address
Ph no /
Mobile
Net Worth *
10. * Opinion report on the bank’s prescribed format should be prepared.
211
11 Details of existing banking arrangements
Name of the
Bank / Branch
Facility Limit Outstanding Banking since
212
12 Details of Associate / Sister / Identical firms:
Name of the
unit
Name(s) of
pro/ partners
Banking with Limit Outstandings
13 Details of registration under Shops
& Establishments Act / Sales tax Act
14 Position regarding Statutory
assessment under IT / Sales tax
/ Any other Year upto which
assessment completed
15 Muncipal / or Local Authorities
permissions / Licences for running
eating houses – Restaurants -
16. Credit facilities required
Fund based Limit required Non fund based Limit required
Cash Credit (Hyp.) Letter of Credit
Term loan) Bank guarantees
Total Total
For term loans – Details of assets to be acquired (pl. enclose detailed list if necessary)
Description Details of the
supplier
Cost Time schedule for
completion
Need for the proposed expenditure
213
Cost Amount Means Amount
Land & Building Own funds
Equipment
i) Interiors
Decoration
ii) Furniture /
Fixtures
iii) Air conditioning
plant
iv) Kitchen
equipment
a) North Indian
Cuisine
b) South Indian
Other loans
(specify source)
Other assets Bank loan
Total Total
17. Security Offered
A Stock (Please give brief details of
stocks)
B Mortgage of immovable properties
(Please furnish details of properties
offered, in whose names they stand,
nature of mortagge, estimated market
value, priori charges if any)
C Life Insurance Policies, shares
Debentures etc (give details)
D Guarantee (please indicate Guarantor ,
his worth etc.)
214
Place Signature of Applicants
Date
215
BUSINESS INFORMATION
1. State whether franchisee
2. Details of suppliers/
principals
3. Seasonality of activity
(specific peak & off-peak periods)
5. Terms of Purchase/procurement
% of Credit purchases to total
purchases
% Period of credit enjoyed Months Average level of sundry
creditors
Rs.
Estimated value of remittances to suppliers by DD/TT pa: 6. Requirement of stocking
Average stock holding Rs. Availability of storage
facilities/address thereof
Rented/owned
Level of competition
i. Whether a specialty Restaurant or General one Any other
special features like volume sales/catering etc.
ii. How many similar Restaurants are located in the area, say within 500 mts.
iii. How many restaurants are running successfully in the neighborhood
7. Marketing arrangements
Major Buyers/consumers with long term arrangement for supply to offices.�
Catering arrangements.
8.Major competitors & their advantages
216
9. Competitive advantage of the unit.
10. Terms of sales
% of Credit sales to total sales
%
Period of credit given Months
Average receivables level Rs. % Credit Card sales total sales – (present/projected) 11. Performance Parameters Past/projected Past three years Projections 31-3.. 31-3.. 31-3.. 31-3..
Sales/income
Net Profit
Depreciation
Cash Accrual
Tangible Net
Worth
TOL/TNW
Details of Security offered
(i) Immovable property
Description
of property
Name of
the Owner
Value of
the
Basis of
Valuation
(ii) Liquid securities
Description Name of
the owner
Face
Value
When
Acquired
Present
Value
Details of Guarantor where applicable
Name of the
Guarantor &
Age Qualific
ation
Net
worth
Banking
With
I/We declare that the information given in the applicationform are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me/us. I/We shall furnish all other information that may be required by Bank in connection with
217
my application. The i nformation may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards/action for recovery of bank dues including publication of defaulters names in website/submission to RBI.
I/We confirm that I/We have no borrowing arrangements for the unit with any
bank except those indicated in the application. I/We confirm that I/We are not
defaulters of any Bank/any financial Institution. I/We also confirm that there
are no overdues/statutory dues owed by me/us and that I/We have/had no
insolvency proceedings against me/us nor have I/We ever been adjudicated
insolvent. I/We undertake to abide by the Rules and Regulations of State Bank of
India in respect of the facilities being extended to me/us.
Signature of Borrower
Date :
Place
: List of documents to be attached
1. Partnership deed in original (to be returned) and a copy thereof
2. Memorandum & Articles of Association with certificate of Incorporation in
original (to be returned) and copies thereof
3. Copies of relevant license, documents pertaining to ownership/tenancy/lease
agreement in respect of premises where activity will be carried out/service or
trade related agreements etc.
4. Latest copy of income-tax return/ sales tax Assessment order etc.
5. Statement of account from the existing banker for last 6 months.
6. Copy of the Title deeds relating to collateral security being offered.
7. Photocopies of PAN card of partners/Directors wherever available
8. Copies of balance sheets for the past three years (audited wherever applicable)
9. Statements of personal assets and liabilities of Proprietor/ Partners/
Directors/Guarantors
218
10. Photographs of Proprietor / Partners / Directors/ Guarantors
l
219
Appraisal form
Name of the Unit / borrower:
Segment :
Sector: Priority / non priority
Assessment of Working Capital / Term Loan
1. Performance & Profitability:
(Rs. in 000s)
Past Project
Ed
31.03…. 31.03
…
Years Curren
t Yr
Next Yr
(pro)
31.03
….
31.03… 31.03…
a)Sales /
income
b) Other
Income
Credit score wherever applicable :
2. Working Capital Required:
Estimated average stock holding at any one time : Rs.
Estimated average receivable outstanding : Rs.at any one time
----------------------
Less Estimated average credit enjoyed on purchases : Rs.
---------------------
Working capital required (1) : Rs.
---------------------
220
3. Sources from which required working capital would be met:
Net Working Capital in business (NWC) : Rs.
Bank Finance Recommended : Rs.
Other sources : Rs.
-------------------
(2) Rs. (A)
===========
OR
… % of Annual Turnover : Rs. (B) Working
Capital assessed /recommended
A or B above whichever is more ie., : Rs.
* Assessed Working capital @ ….% PAT : Rs.
Stand by line of credit recommended @ …% of above : Rs.
Concessions in service charged proposed if any : And
justifications therefor
Term loan :
Details of fixed
Assets
Cost price /
estimate (incl.
Taxes)
Own funds Bank finance
Land
Building
Others
Total
Comments on Debt / Equity:
221
Comments on DSCR (in brief):
Analysis based on Risk matrix
Brief comments on limits recommended
In case of renewals comment on conduct of account, credit summations, timely
submission of stock / financial statements, return of cheques issued / cheques purchased etc
should be incorporated.
Terms and conditions of sanction
a. SECURITY:
Facility Primary Collateral Guarantee
WDV Name
MV NW
Valuation dated As on
Description of collateral security :
Deviation from existing security (if any)
b. MARGINS : (FOR EACH FACILITY AS APPLICABLE)
Cash Credit: Existing Proposed
Stocks
Receivables (Cover –days)
Letter of Credit
BG
Term Loan
222
c) RATE OF INTEREST:
Facility Pricing
d) REPAYMENT SCHEDULE:
e) INSURANCE
f) SUBMISSION OF STOCK STATEMENTS
g) INSPECTION
h) PROCESSING FEE
i) UPFRONT FEE
j) CONCESSIONS IN SERVICE CHARGES
Appraised by Assessed by Sanctioned by
Signature
Name
Designation
Date:
State Bank of India
Branch
223
ANALYSIS OF BALANCE SHEETS
(Rs. in 000’s)
Liabilities 20 / 20 / 20 /
State Bank of India
Other Banks
Sundry Creditors
Expenses
Loans
Other Liabilities
Total Current
liabilities (A)
Term Loans
Others
Total Deferred
Liabilities (B)
Capital & Surplus
©
Total liabilities
(A+B+C)
Assets 20 / 20 / 20 /
Cash
Investments
Stock
Sundry Debtors
Others
Total Current
Assets (D)
Net fixed Assets (E)
Miscellaneous
assets (F)
Intangibles (G)
Total
miscellaneous
assets H = (G+F)
224
Total assets
(D+E+H)
Working capital surplus / deficit (current assets – current liabilities) Rs.
Tangible Net Worth (C – G) ….. …. … Rs.
Capital Base:
1. Total liabilities / Tangible Net Worth (Ratio) …….
2. Sales / Tangible Net worth (Ratio) …….
Profitability:
3. Net Profit / Sales (Ratio) ……
4. Net Profit / Total capital employed (Ratio) …..
(Including current and deferred liabilities) (Ratio) …..
5. Net Profit / Proprietor’s capital employed (Ratio) ….
Current Position: As on ………..
6. Stock about ……. Months sales
7. Sundry Debtors about ………….. months sales
8. Sundry Creditor about …… months purchases
225
OPINION / CREDIT REPORT
Name of the unit
i) Partners’ / proprietor’s capital invested in business:
Name of Partner /
proprietor
Capital invested Loans to the firm,
if any
Partner’s /
Proprietor’s over
drawings, if any
Total
Capital of the firm Rs.
Add : Loans from partner / proprietor Rs.
Add: Reserves and surpluses Rs.
Less: Partners ‘ / proprietor’s overdraft Rs.
Less Debit balance in profit & loss account Rs.
Less : Intangibles, if any Rs.
Tangible Net Worth of the firm / proprietor Rs. ii)
Means of partners / proprietor
(These details should be furnished separately for each partner – if a partner has no assets,
indicate accordingly)
226
Name of the partner / proprietor :
(a) Details of immovable properties owned.
Name of property Location Realisable value in
Rs.
Details of prior
charges if any
Total (A)
227
(b) Details of movable properties :
Nature of assets Realisable value in RS. Details of prior charges, if
Any Shares
Debentures
Insurance policies
(surrender value)
Other (please
specify)
Total (B)
Total Value of assets (A+B) Rs.
Less Borrwoings agasint total assets mentioned above
Other borrwoings / liabilities Rs.
Add: Investment of the partner in business of the firm
Financed investment of the partner in any other business
(specify details) Rs.
Total net means of the partner / proprietor Rs.
The net means of the partner (Shri / Shrimati. ) can be
conservatively estimated at Rs. The aforesaid information has been verified from
independent market sources.
(Similar information should be furnished for each partner)
228
iii) (a) Tangible Net Worth of the firm Rs.
(b) Aggregate Net means of the partner Rs.
General Remarks :
(Please comment on (a) business ability, (b) credit enjoyed in the market and (c)
reputation for honesty, integrity, etc.)
Date ____________ Branch Manager
STANDBY LOAN TO CORPORATES FOR PURCHASE OF VEHICLES
1. Target Group
: Existing corporate borrowers enjoying fund based facilities of at
least Rs.1crore in C&I and SSI segments
2 Eligibility
: CRA rating of SB7&SBTL7 and above
3 Purpose
: Exclusively for purchase of new vehicles,(cars, vans, MUVs, mini-
bus) for use by promoters/executives of the unit.
4 Type of facilities
: Term Loan
5 Quantum of Finance
: 10% of the fund based limit not exceeding Rs.25lacs
6 Margin
: 20% of the cost of the vehicle including tax and insurance
229
7 Rate of Interest
: 1% over SBAR irrespective of the CRA Rating
8 Security:
- Primary
- Collateral
:
Hypothecation of the vehicle by noting charge with the RTO
9 Processing fees NIL
10 Repayment
In monthly / quarterly instalments not exceeding
60 months
11 Documentation
: i) As per simplified SME Documentation
ii) The arrangement letter should indicate that the release of the
Stand-by Loan will be at the sole discretion of the Bank.
iii) In the case of the loan being extended to partnership firms,
all the partners should request for the release (disbursal) of the
loan.
12 Special features
: The loan should be disbursed as and when requested for,
subject to the following conditions:-
i) the limit is not overdue for renewal
ii) the borrowal accounts are regular
iii) conduct of the account is satisfactory.
13 Methodology and
Operation of the
account
A simple note should be put up to the Branch Manager / Division
Manager for release of the loan.
Product Highlights:
230
Very often the corporates which are financed by us for their working capital needs resort to finance
from NBFCs or other banks for purchase of vehicles for their CEOs or other senior functionaries. This
product is specially designed for extending credit by way of term loan upto Rs.25lacs for SB3 and
above rated companies enjoying credit facilities of at least Rs.1crore with us.
Marketing tips:
� At the time of renewal of existing working capital limits of eligible units, this product can
be offered as an add-on.
� The repayment period is 60 months
� The rate of interest is far lower than that charged by car financiers, etc.
AUTOCLEAN
1. Target Group
: .Owners of auto-rickshaws to buy CNG/LPG kits from authorised
dealers
2. Eligibility
: � Account should be a standard asset if auto is already
financed by us.
� Takeover of accounts from other banks is permitted
subject to takeover norms.
� Borrowers of other banks are NOT eligible.
� Commercial vehicles are also eligible if necessary
permits are eligible.
3. Purpose
: Conversion of petrol operated vehicles to CNG/LPG operated
vehicles by fitting CNG/LPG kits
4. Type of facilities
: Medium Term Loan
5. Quantum of Finance
: Total cost of kits subject to a maximum of Rs25000/-
6. Margin : NIL
7. Rate of Interest : 1.50% below SBAR
8. Security: :
231
- Primary
- Collateral
Hypothecation of vehicle OR group guarantee
NIL
9 Processing fees Waived
10 Repayment
24 months
36 months if vehicle is already financed by us
11 Documentation
: � Hypothecation Agreement As per simplified SME
Documentation
� Irrevocable letter of authority from the borrower
� Form 29 &30 (Blank Transfer form)
� Form 34 for creation of charge by RTO using hologram
13 Special features
: � Obtain the following –
� Driving license
� Permit
� Badge copy
� Fitness Certificate issued by RTO
� Meter Certificate
� Work Order from RTO-BTI form
� RTO endorsement on the RC book after fitting the kit
� Fitting of the kit should be at an RTO approved centre.
Product Highlights:
This is a product designed to assist in cleaning up the environment, especially in metro and urban centres which have become highly polluted due to auto emissions of all types of vehicles. This product is aimed at owners of auto rickshaws who are obliged to convert their engines to run on CNG / LPG in Delhi and Mumbai by a Supreme Court direction and the others may do so on a voluntary basis. This product is by way of a term loan to meet 100% cost of conversion subject to a maximum of Rs.25,000/- repayable in 24 months. Apart from the 2 metros, where it is mandatory, at other places, it should be ensured that there are adequate refill facilities available for auto rickshaws which are converted to CNG /LPG.
Marketing Tips:
232
Our existing borrowers of auto richshaws can be targeted for this product on a longer repayment period of say 36 months .
FAQs
� How do we ensure that refill facilities are available in the centre?
The applicant must produce a work order from the RTO before we consider
this case. Normally the work order is issued only if refilling and other facilities
are available.
CAR LOANS TO SME UNITS
Car Loan to SME Unit (New Vehicles)
13. Purpose
: To provide term loan to the promoter/partner / senior
executive of the SME units having borrowing
arrangements with the Bank or their family members either
in their own name or in the unit's name for purchase of
passenger cars, jeeps, multi utility vehicles (MUVs) and
sports utility vehicles (SUVs) etc.
14. Target Group
: The loan can be extended to as many promoters / partners
, senior executives and even their family members * either
on their own name or unit's name based on their individual
net worth and repayment capabilities.
SME CA holders of the bank or their family member either
in their own name or in the unit’s name and other SME
233
clients subject to obtaining a NOC from the bank where
they might have a loan account. MCG units of the bank will
also eligible for the product.
The promoter / partner/ Senior Executive will act as a joint
applicant whenever the loan is taken in the name of unit
and the joint applicant will also be liable to repay the loan
amount.
In case the loan is taken in the joint names of the unit and
a senior executive, Company or the promoter or the
partner will guarantee the loan.
Availing of car loan in the promoter's name or firm's name
will be left to the choice of the customer.
*Family for this purpose is spouse and children.
15. Nature of Facility : Term loan.
4 Eligibility : Case I - When the loan is availed of in the name of an
individual: Income: An individual must have a net annual
income of Rs.100,000/- and above for the last year as per
income tax return.
Case II - When the loan is availed in the name of unit:
Since the promoter/partner/ senior executive will be the
joint applicant in this case and liable to repay the loan so
he/she should meet the following criterion:
Income: The joint applicant must have a net annual income
of Rs.100,000/- and above for the last year as per income
tax return.
Definition of “Senior Executive”:
Employees in Top Management, Directors or employees
holding the position of responsibility in an Organisation or
in other words executives falling one level below the
promoter / partner in hierarchy
5 Authorised
Branches
: All branches catering to SME clients can extend the
schemes to SME clients.
6 Security : • Only hypothecation of the vehicle(s) purchased will be
taken as a security.
• This hypothecation charge must be mentioned in the
books of the RTO.
234
• No additional security including the charge on the
existing collateral will be asked from SME clients.
7 Assessment : Assessment of loan amount will be entirely based upon the
personal net worth and repayment capabilities of the
individual or the joint applicant when the loan is in unit's
name.
Any loan obtained under this facility will not be linked to the existing facilities of the SME units and no additional
security will be asked.
8 Loan Amount : The maximum loan amount would be 2.5 times the net
annual income (i.e., income as per latest income tax return
flied less taxes payable).
Regular income from all sources can be 'considered
provided the sanctioning authority is satisfied with the
proof of income.
The income of spouse can be included provided the
spouse guarantees the loan.
For new vehicles, there is no ceiling in loan amount
In any case the EMI / NMI* percentage should not. exceed 50%
The A.G.M. Region/Branch or the sanctioning authority,
where such sanctioning authority is higher in rank than
A.G.M, will have the discretion to grant a higher loan,
subject to EMI / NMI percentage not exceeding 60% in
deserving cases or owing to strategic reasons.
*(EMI - Equated Monthly Installment) (NMI - Net Monthly
Income) _
9 Margin : 15%
The sanctioning authority will have discretion to reduce the
margin by 5%. A further reduction of 5% can be given by
an authority of the rank of AGM based on the factors like
relationship, business expected, competition, etc. In any
235
case the total reduction in margin should not be more than
10%.
10 Rate of Interest * : FLOATING RATES:
10% p.a. (fixed) interest rate for all new loan sanctioned
upto March 2010 and 10% p.a. fixed for 2nd and 3rd year
with reset clause thereafter.
11 Penal Interest : Since the applicants under this facility will be our SME
borrowers it should be possible to monitor closely and
prevent the accounts from becoming irregular. However
should some accounts become irregular due care should
be taken to make then regular within 60 days. .
In case the account remains irregular beyond a period of
30 days a penal rate of 1 % p.m. over and above the
applicable rate can be charged.
12 Processing Fee : nil
13 Repayment : 7. The loan should be repaid in suitable
monthly/quarterly installments acceptable to the
customer in such a manner that the loan is
liquidated within a period of 7 years. The
customer’ will have option for payment in shorter
duration.
b) The Equated Installment will be determined on the basis
of the current rate of interest.
c) Post dated cheques should be obtained from the
borrower.
Since we are dealing with the promoter / partner of the
SME units in their individual capacity and not as
employees of the unit check off facility may not be
applicable under this facility. Suitable standing instructions
on their accounts to recover installments and interest may
be taken.
236
14 Security Documents : As applicable to “P” Segment Car Loan
15 Insurance : The vehicle purchased is’ to be kept comprehensively
insured in the name of the borrower for the market value or
at least 10% above the loan amount outstanding,
whichever is higher, and the Bank’s interest as a
236uthorized236 should be noted in the certificate of
insurance and insurance policy. A copy of this is to be
retained with the loan documents.
Insurance register is to be maintained
16 Mode of
Disbursement
: Amount should be remitted direct to the supplier/dealer by
means of a crossed ‘Account Payee’ demand draft /
banker’s cheque which should be forwarded under cover
of a letter as per Annexure car IV.
The beneficiary’s Bank name and if possible, Bank
account number should be ascertained from the
beneficiary and mentioned in the draft/banker’s cheque.
No charges should be levied for issuance of banker’s
cheque/demand draft.
17 Prepayment
Penalty
: Prepayment fee of 2% of the amount of the loan prepaid
will be levied if the loan is taken over by another bank / FI
Or the loan is repaid before expiry of half the agreed
repayment period Or partial repayment is made in the first
year
No pre payment to be levied if the loan is foreclosed in
order to avail a fresh car loan.
18 Inspection : 7. For Standard Asset .accounts periodical.
Inspections are waived after the initial inspection.
However, if there is a default of 2 monthly
installments, inspection would be required. In case
of NPA accounts inspections should be made twice
a year.
b) Inspection register is to be maintained properly.
19 Discretionary
Power
: To be exercised as per the Delegation of Powers advised
by the LHO
20 Papers to be : The following papers to be submitted along with loan
237
submitted application
� 2 passport size photographs of borrower /
guarantor(s).
� A copy of passport /voters 1D card / PAN card
� Proof of residence
� .Copy of Income Tax Return for last two financial
years, duly acknowledged by ITO.
21 Applicants
restricted under
this facility
: This facility should not be extended in cases where:
• The SME units are weak or have turned NP As or likely
to become NP As.
• The relations between branches & promoter(s) is soured.
• Wherever it is proposed to initiate legal action against
the unit / promoters
22 Authority to release
Car Loan
“SMGS IV are authorized to release SME Car Loan for units
which have credit limits classified as standard assets (not below
SB-7 or SBTL-7) and where the car
loan amount does not exceed Rs.25 lacs or 10% of the existing
fund based exposure to the unit (whichever is less) and seek
post-facto approval of the appropriate authority.”
SMGS IV will include Chief Managers of SMECC
/RASMECC/RCPC’s.
The accounts handled by RMME’s may be sanctioned by Chief
Manager/AGM of the Branch or AGM Region to whom the
RMME reports subject to the above.
In case of those Branches not attached to SMECC
/RASMECC/RCPC’s Chief Manager of the Branch can sanction
the loan.
Car Loan to SME Unit (Used Vehicles)
238
1 Purpose
: To provide term loan to the promoter/partner of the
SME unit or their family members either in their. Own
name or in the unit’s name for purchase of passenger
cars, jeeps, Multi Utility Vehicles (MUVs) and SUVs not
more than five years old.
2 Loan Amount Subject to a maximum of Rs. 15 lakhs.
(All other details under this head are same as that of
car loan to SME Units)
3. Valuation : • Certificate of fitness/valuation from a reputed
garage would be required which should be retained
with the loan documents. The garage should be
238uthorized by the Liaison Officer in the LHO/ZO
in big cities. No valuation certificate is required if the
car is sold under the Maruti True Value scheme or
Automartindia.
• Branches should ensure that the fitness and
valuation is appropriate to the past ownership
pattern. Care should be taken to avoid models,
which have a low second/third hand demand like
Fiat, Uno, Daewoo, Matiz, etc.
4. Take over of loans i) Takeover of car loans may be considered selectively
where:
a. The vehicle is not more than 2 years old
b. It is a single ownership vehicle
c. No insurance claim has been availed and.
d. The account of the borrower with the other bank is a
Standard Asset i.e. all repayments have been made as
per terms of sanction of the original financier.
ii) The loan should be repaid within 7 years from the
date of the original purchase of the vehicle
iii) Reimbursement of costs of unencumbered vehicles
can also be given under the above takeover norms and
239
other terms of financing old vehicles up to 2 years of
age.
5. Repayment : • For old vehicles recovery should be such that the
loan gets repaid within 7 years from the date of
original sale.
• Maximum repayment period to be fixed as per age
of the vehicle. Repayment schedule will be fixed
while ensuring that the loan gets repaid within 7
years of life of the vehicle e.g., a five year old
vehicle will be financed with a repayment period of 2
years only.
(All other details under this head are same as that of
car loan for new vehicles)
6. Rate of Interest : FLOATING RATES only
All Centres:
a. Upto 3 years: 2% above SBAR
b: Above 3 yrs and upto 7 yrs: 2.25% above SBAR
7. Special Remarks : � All the other features for car loan for used
vehicles are same as the car loan for new vehicles.
� OD facility is NOT available for SME Car Loan (
both new and used vehicles)
* SME Car Loan Revised Interest Rate
The rates are valid for all sanctions upto 31st March 2011.
2. The loans would cover only new cars.
3. The period of loan would be maximum of five years
240
SME units/ MCG units
with rating SB1 – SB5
9.00% in the first year, 9.25% for 2nd year and 9.50%
for 3rd year. Thereafter, rates would be subject to
reset to card rates, presently, 3.75% above Base
Rate for 4th and 5th year.
SME units with rating SB6
– SB9/ Units banking with
other Banks
9.50% in the 1st year and 9.75% for 2nd and 10%
for3rd year. Thereafter, rates would be subject to
reset to card rates, presently, 3.75% above Base
Rate for 4th and 5th year.
Unrated SME borrower
(below Rs.25 lacs)
10% in the 1st, 2nd and 3rd year. Thereafter, rates
would be subject to reset to card rates, presently,
3.75% above Base Rate for 4th and 5th year.
In case of CA holders 10% in the 1st, 2nd and 3rd year. Thereafter, rates
would be subject to reset to card rates, presently,
3.75% above Base Rate for 4th and 5th year.
PARYATAN PLUS
13. Target Group
: All segments of tourism namely :
� Hospitality Industry
� Transportation
� Travel agents
� Tour operators
� Adventure tourism
� Religious tourism
14. Eligibility
: Individuals, partnerships, corporates, trusts
15. Purpose
: � Construction / renovation / modernisation / expansion
to Hotels / Yatri Nivas / Dharamshalas, etc.
� Construction of office premises/purchase of office
furniture and computers etc., by travel agents/tour
operators
� Purchase of luxury buses/ coaches ,cars, vans etc., at
tourist sites
� Purchase of house boats/ luxury boats
� Setting up of restaurants/coffee houses/ icecream
parlours etc.
� Amusement parks / Ropeways
� Health clubs / Spas
241
16. Type of facilities
: CC(Hyp) , TL , LCs, BGs
17. Quantum of Finance
: Minimum Rs.2lacs
18. Margin
: 20%
40% for purchase of old vehicles of less than 5 years
19. Rate of Interest
: As per C&I / SBF rates as the case maybe
20. Security:
- Primary
- Collateral
: Hypothecation of assets financed by the Bank
Tangible Collateral of immovable property or TDRs,NSCs, KVPs,,
etc for at least 50% of the loan amount
21. Processing fees As applicable to C&I / SBF units
22. Repayment
: TL 3 to 7 years including start up period not exceeding 18
months CC Repayable on demand
23. Documentation : As per simplified SME Documentation
24. Special features
: � Maintenance of Current Account to route all receipts is
mandatory
� DSCR - minimum 1.5 in case of vehicles
� Appropriate licenses to be obtained
� Only skilled / trained persons eligible
� Audited financials are desirable
� Take over of loans permissible subject to take - over
norms
� For tourism related activities, WC limit over Rs.20lacs or
Advance for purchase of more than 10 vehicles under
this scheme must be classified under C&I segment and
should be treated as such for all purposes.
� Luxury coaches upto 10vehicles can be financed under
Transport Operators Scheme
242
Product Highlights:
A comprehensive product aimed at the Tourism industry for providing finance for
various activities such as hospitality industry, transportation and tour operators have
been brought under the ambit of "Paryatan Plus".
No cap is stipulated for this product. Credit facility can be granted by way of TL / CC /
LCs / BGs for the purpose of construction of hotels / rest houses / Yatri Niwas, Luxury
buses / Boats / Amusement Parks, Health Spas, Travel agents etc.
Marketing Tips:
• Tour operators, travel agencies are ready market for this business.
• Hotels, restaurant owners at tourist sites can be targeted for this product.
• Established and reputed travel agents such as Thomas Cook, Sita travels, SOTC
etc., can be contacted.
• Takeover of existing loans from Banks / FIs is a ready source of business. TLs
extended by Tourism Development Corporation at high rates of interest can
be taken over subject to take over norms being fulfilled.
FAQs
� How can we decide whether the term loan for purchase of vehicles by a large travel
agency should be considered under Transport Plus or Paryatan plus ?
Transport plus has an upper ceiling of Rs.7.50 crs.but this product has no ceiling.
Enclosure to Circular No. CIRCO/ADV/221/2004-05 dated 14.12.2004
State Bank of India Small Business - Transport Operators …………….. Branch Interview-cum-Appraisal Form
243
APPLICATION FOR TERM LOAN / WORKING CAPITAL ADVANCES
1. Personal Data : 1.1 Name of the Applicant : 1.2. Business Address : 1.3. Constitution : 1.4. Experience Name(s) of proprietor / partners / Age Previous Office-bearers of co-operative society : experience 1.5. If already owning vehicles, details (like type, year of manufacture, cost price, present estimated value, income therefrom, if a loan has been taken against them, details) :
1.6. Whether the vehicle will be driven by the applicant) : 1.7. Staff employed : 1.8. In the case of owner-drivers, a) Number of the dependents of the family : b) Minimum sustenance amount required for the family : c) Present monthly income. d) Whether belonging to scheduled caste / tribe: e) If owning land, its size : 2. Date on the vehicle proposed to be purchased : 2.1. Type, make and year of manufacture : 2.2. Fuel used :
2.3. Dealer's name and address :
2.4. Cost: : (Proforma invoice to be enclosed. In the case of secondhand vehicles, valuation certificates from two reputed dealers, workshops to be enclosed)
i) Chassis : Rs. ii) Body Building : Rs. iii) Others ( ) : Rs.
------------------------------
244
Total : Rs. ------------------------------ Applicant's contribution ( % ) : Rs.
------------------------------ Loan required : Rs.
-----------------------------
2.5. If a working capital loan is required, details relating to purpose (enclosing estimates / invoices, where applicable) amount involved, etc.) : 2.6. Amount of working capital required : Rs. 3. Operational viability 3.1. Carrying capacity of the vehicles (persons / load) 3.2. Route on which or area where the vehicle will
operate : 3.3. Position relating to the obtaining of the necessary licence / permit : 3.4. Anticipated monthly earnings : 3.5. Factors which assure the applicant of achieving
the above earnings and of a successful business
in his area of operation :
3.6. Particulars of Sales Tax & Income Tax assessments: 4. Repayment : 4.1. Start-up period required, with reasons : 4.2. Monthly repayment towards existing Bank Loan : Rs. Monthly repayment towards proposed Bank Loan: Rs. Monthly repayment towards other borrowings (To be specified) : Rs. -------------------------- Total : Rs. (A) -------------------------- Anticipated net cash accruals as per enclosure : Rs. (B) -------------------------- Debt service ratio : B / A : -----------
245
5. Security :
6. Any other remarks:
Date : (Signature of borrower).
Place :
Name of the Bank official who interviewed the
applicant
7. Remarks of the Appraising official.
8. Loan recommended, with stipulations:
Date
Recommending Officer Recommending Officer Recommending Officer
9. Section:
Date Sanctioning
Authority.
246
TRANSPORT OPERATORS
OPERATIONAL VIABILITY:
1. Income per month:
i) Number of days in a month the vehicle will be on the road : ii) Number of kilometers it will run per day : iii) Fare / Rate per kilometer : Rs. iv) Average income per month : Rs. (A) v) Any other (outside) income : Rs. vi) Total income (iv) + (v) : Rs. (B) 2. Expenses per month:
Fuel per month = XYZ N
where
X = Cost of fuel per litre. Z = Kilometers run per day Y = Cost of fuel per litre N = No.of kilometers the vehicle will run Per litre.
i) Motor and other municipal taxes : Rs. ii) Insurance premium : Rs. iii) Garage rear : Rs. iv) Depreciation : Rs. v) Interest on borrowings : Rs. vi) Maintenance expenses : Rs. vii) Cost of oil, spares, etc. : Rs. viii) Staff salary : Rs. ix) Drawings of the operator : Rs. x) Others : Rs. --------------------
Total expenses Rs. (C) -------------------- 3. Surplus: B - C : Rs. Income tax,if any : Rs. Net surplus : Rs. Depreciation added back : Rs.
4. Net cash accruals : Rs.
---------------------
TRANSPORT PLUS
247
1. Target Group
: Surface transport operators owning more than 10 trucks
/tankers / tippers / luxury buses etc including the proposed
generally complying with eligibility criteria detailed below
2. Eligibility
: � Transport operators holding valid national / State route
permits
� The promoters/CEO should be IT assesses.
� The promoter/ CEO should have experience of 3 years or
more in the field, and should have an annual income of
Rs.3lacs as per IT assessment in the previous year.
� Dealings with their bankers should have been
satisfactory.
� Should be reputed and IBA approved in the case of
trucks.
� Should record a rising trend in income and profits in the
last two years with a profit of at least Rs.3 lacs in the
past two years.
� Should own more than 10 well maintained and road –
worthy vehicles
� Should have had dealings with banks /FIs for at least 2
years.
� Should have a receivable level of within 4 months
� Value of orders on hand should be at least 30% of
projected annual turnover.
� Average DSCR (gross) :Minimum 2*
� Current ratio minimum 1.33*
� TOL /TNW maximum 2.75*
(*These norms are relaxable by the sanctioning authority upto
the levels as per loan policy guidelines if 100% tie – up
arrangements are in place.)
3. Purpose
: To finance purchase of new transport vehicles and WC finance
against receivables for cost on road ie all costs such as, invoice
price of the chassis, cost of body building, road tax, insurance,
etc..
4. Type of facilities
: TL and Cash Credit
5. Quantum of Finance
: Corporates Non Corporate
TL& CC
- Rs.10 lacs to Rs.10crs Rs.10lacs to Rs.7.50crs
248
6. Margin : TL & CC 20%
7. Rate of Interest
: For TL : 0.25% above SBAR
For CC: 1.00% above SBAR
8. Security:
- Primary
- Collateral
:
Hypothecation of vehicles financed, spares and receivables
Other unencumbered vehicles / immovable property for a value
of not less than 25% of loan amount
9. Processing fees 1%
10. Repayment
: TL – Maximum of 5 years . EMIs to start from after 3 months.
PDCs to be obtained for the entire period of repayment
CC - Repayable on demand and renewable annually
11. Documentation
: As per simplified SME Documentation
12. Special features
: � Prepayment charges of 1% p.a. for the amount
prepaid and for the residual period
� Inspection once year
Product Highlights:
So far, NBFCs have been the major source of finance for fleet owners especially of surface transport. This product has been designed to take care of the credit needs of
249
the transport vehicle owners of 10 or more vehicles used for transportation of goods and passengers and holding valid permits for plying the vehicles either within the state or inter- state or national permit. The product comprises of a TL portion for financing of 80% of the cost of the vehicle and a cash credit portion to take care of the working capital needs of the operation to the extent of 80% of the receivables not more than 4months old.
Marketing Tips:
• Exporters of perishables such as seafood, vegetables and milk who use
refrigerated vans for moving their merchandise from the production location
to the processing plants / ports can also provide business for the Bank under
this product.
250
ANNEXURE
STATE BANK OF INDIA
BRANCH:
FINANCING FLEET OPERATORS - LOAN APPRAISAL NOTE
NAME OF THE FIRM/COMPANY:
NAME OF THE CHIEF PROMOTER/:
CHIEF EXECUTIVE
CUSTOMER/ A/C NO:
1.a) Personal details:
SR.
NO.
PARA METERS CRITERIA ELIGIBILITY
(YES/NO)
1. Experience in transport business More than 3 years
2. Owning a house In own/spouse name or
ancestral (may be mortgaged)
3. Income Tax Return filed/ assessed
for last year
For income of 2 lacs and above
4. Dealing with Banks Satisfactory record
b) Business details:
251
1. Constitution Pvt./Public Ltd. Company/
Partnership
2. IBA approval and/or Membership of
local transporters association.
For trucks only
3. Continuous profit Last 2 years
4. Income shows a rising trend Last 2 years
5. No of vehicles owned (including the
proposed)
More than 10 well-maintained
vehicles (age not more than 12
years)
6. Maintenance of existing vehicles Evidenced by routine frequency
of servicing/ accident record
7. Dealing with Banks/FIs/ NBFCs Satisfactory record
8. Assured cash flow Tie up with companies
9. Quality of receivables Up to 3 months of income
10.
Value of orders/contracts on hand to
Estimated Income (%)
Over 30%
11. Repayment period proposed (TL) Up to 5 years
12. Liquidity Minimum 1.33 (1.33)
13. TOL/TNW * Maximum 2.75 (3.00)
14. Average gross DSCR (TL) * Minimum 2.00 (1.75)
15. Promoters’ contribution to the
project (TL)
Minimum 20%
16. Debt/equity Maximum 2: 1
* May be diluted upto the indicative level as per the loan policy guidelines, as shown in bracket, for
units having 100 % tie-up arrangements.
c) Collateral Security:
252
1. Value of collateral security (all
existing unencumbered vehicles and
others, if any) /loan amount (%)
25% and above where 100%
tie-up arrangements exist,
otherwise at least 50%.
The proposal will be considered acceptable only if the answers are “yes” for all the above 21
parameters under the eligibility column of sl. no. 1(a), (b) and (c).
(Rs. In crores)
2. Performance & Financial indicators:
As on 31.03 Actuals Actuals (Earlier
Estim.)
Estim (Cur. Year) Projections (Next
Year)
PUC
TOL
TNW
TOL/TNW
Cur. Ratio
3. Term Loan :
Commercial viability:
Sales/Income
Net Profit
Cash Accruals
Interest
TOTAL
TL repayments
Interest
TOTAL
Gross DSCR
Average Gross DSCR
253
Net DSCR
Comments on DSCR (in brief)
4. Assessment of Cash Credit limit:
Receivable levels: (Months/Days)
Receivable/Payments
Actuals Estimated Projected
Receivables
S. Creditors
Assessed Bank Finance:
Assessed Bank Finance Actuals
Estimated Projected
Year
TCA
OCL
WC Gap
NWC
BANK FINANCE (BF)
Brief comments on the assessment of the cash credit limit:
(Additional information may be added to cater to a particular proposal)
5. Recommendations for the proposed facilities:
254
6. Submitted for sanction.
Signature :
Designation :
Appraised by Assessed by
State Bank of India,
……………………..Branch,
Date:
ANNEXURE-3
STATE BANK OF INDIA
BRANCH:
FINANCING FLEET OPERATORS
LOAN APPLICATION FORM
-----------------------------------------------------------------------------------------------------------
PLEASE FILL UP THIS FORM ONLY IF THE ANSWERS TO ALL THE FOLOWING QUESTIONS ARE 'YES'
-----------------------------------------------------------------------------------------------------------
255
1. Whether the promoters have satisfactory record of dealing with Banks and have never
defaulted to any Bank/FI/s?
2. Whether the fleet possesses more than 10 well-maintained vehicles, including the proposed
vehicle/s?
3. Whether the registered/administrative office is situated at metro/urban/semi urban centre?
4. Whether the unit is earning profit?
-----------------------------------------------------------------------------------------------------------------
PLEASE USE SEPARATE SHEET, WHEREVER SPACE IS NOT SUFFICIENT
-----------------------------------------------------------------------------------------------------------------
A. PERSONAL DETAILS OF THE CHIEF PROMOTER/CHIEF EXECUTIVE
1. a) Name: b) Son/wife of: c) Date of Birth:
2. Residential address:
Tel.Nos:
Fax No:
e-mail:
3. Your house is: Owned
Owned (mortgaged)
Rented
4. Academic Qualification: Is it related to your line of trade?
5. Experience in Transport business
256
(no. of years and brief details):
6. Your Income Tax Permanent A/c No:
7. Details of Bank account:
Bank and branch:
A/c No:
Opened on:
8. Details of assets:
Land/Building:
(location, value etc.)
ii) Vehicles owned:
(Regn.No, make, model, present value)
iii) Life Insurance Policy
(Policy no, sum assured,
amount paid up, etc.)
iv) Bank deposits
(Bank branch, A/c no., present outstandings)
Jewellery and household goods:
(description, value)
257
vi) Others (description, value)
9. Details of liabilities:
i) Housing loan details:
Address of the house/flat:
Loan amount:
Repayment terms:
Present oustandings:
Loan availed on:
Bank & Branch:
ii) Car loan details:
Regn.No:
Make & Model:
Loan amount:
Repayment terms:
Present oustandings:
Loan availed on:
Bank & Branch:
iii) Other loan details:
(including loans from
friends & relatives)
B. GENERAL
258
1. Name of the company/firm:
2. Address:
Regd. office:
Telephone No:
Admn. office:
Telephone No:
Branch office/s:
Telephone No:
3. Constitution:
4. Loan applied for: i) Term Loan: Rs. ii) Cash Credit: Rs. ------------------
TOTAL Rs.
5. Purpose of the loan:
(Purchase of vehicles, working capital
259
requirement, etc.)
6. Mode of repayment:
C. BUSINESS DETAILS 1. Year of commencement of business:
2. a) What is the level of competition for the business?
How do you plan to meet the competition?
What are the marketing arrangements?
Please mention about value and details of tie up
arrangements/orders/contracts with clients:
3. IBA approval obtained? If yes, details:
4. i) Details of Bank Account:
Bank/Branch:
A/c No: Since:
260
ii) Can all sale proceeds be routed through your account with us?
If not, give reasons:
5. What is the quality of your receivables?
How many months’ income do they represent?
Can you give an ageing of your receivables? (as on last 31st
March)
AGE AMOUNT PERCENTAGE OF TOTAL
Less than 1 month old
1 to Less than 2 months’ old
2 to 3 months’ old
More than 3 month’s old
Total 100%
What are the means of finance?
MEANS AMOUNT
(Rs)
GIVE DETAILS (BANK SHOULD BE SATISFIED
ABOUT YOUR ABILITY TO PROVIDE THE
MARGIN)
From own sources
261
Bank loan
Friends and relatives
Others
Total
7. What is the repayment period you are looking for the term loan?
8. What will be the annual cash accruals?
9. What will be your liability towards payment of installments and interest on
term
loan in a year?
10. Whether the cash accruals will be sufficient to take care of the repayment
liability?
11. Brief background of the firm/company:
12. Details of Associate concerns with their borrowing arrangements:
13. Details of major shareholders:
14. Names of Key Managerial & Technical Staff with their
qualification/experience:
15. Are your business operations computerised?
16. Arrangements for periodic maintenance of vehicles:
(Details of routine frequency of servicing, maintenance
procedure, accident record)
17. Anything else you would like to tell about your business.
262
18. What is the collateral you would be able to offer? Give details.
A. UNENCUMBERED VEHICLES:
REGN. NO. & DESCRIPTION PRESENT VALUE (Rs) BASIS
Total
B. OTHERS, IF ANY:
DESCRIPTION PRESENT VALUE (Rs) BASIS
Total
GRAND TOTAL (A + B):
19. Please tell us about your future plans:
What is the level of income/sales you are projecting for next 5 years? Briefly describe
the basis.
What is the level of receivables you are expecting for next 5 years in terms of
month's income/sales?
263
20. a) Whether the vehicles come to the headquarters every month?
b) Can the vehicles be available to the Bank for inspection purpose every
month? If yes, how?
I/we certify that all information furnished by me/us is true, correct and
complete. I/we have no borrowing arrangement for the company/firm with
any bank except as indicated in the application form. There are no
overdues/statutory dues owned by me/us or the firm/company. No legal
action has been taken against me/us/firm/company. I/we shall furnish all
other information that may be required by Bank in connection with my/our
application. This information may also be exchanged by you with any other
agency, you may deem fit. You, your representatives or any other agencies
as authorized by you, may at any time inspect/verify my/our assets, books of
account, etc. in our office/business premises as mentioned above. You may
take appropriate safeguards/action for recovery of bank's dues including
publication of defaulters' name in web site/submission to RBI. I/We further
agree that my/our loan shall be governed by the rules of State Bank of India
as may be in force from time to time.
For and on behalf of the company/firm
Place:___________
Date: ___________ Signature of Chief Promoter/:_____________
Chief Executive with seal
ENCLOSURES:
1. Details of Existing Vehicles :
264
Regn.No.:
Model/Year:
Make:
Name of financer:
Amount:
Present outstandings
2. Audited Balance Sheet for last 2 years :
3. Income Tax Assessment/Acknowledged :
copies of last 3 years (Personal & Business)
4. Bank Statement of last 3 years (Business) :
5. Quotations :
6, Copies of Partnership Deed/Certificate of
Incorporation and Commencement of Business/
Memorandum and Articles of Association:
7. Copies of route permits, driving licenses of drivers:
265
8. Photographs of promoters/guarantors, with their
signatures:
9. Credit Information Sheet of the Promoters/Company/
Firm/Guarantors:
10. Projections for 5 years:
11. Documents of tie-up arrangement:
12. Details of servicing/accident record:
13. Any other papers necessary for loan approval
Transport plus circular
ANNEXURE-4 POST DATED CHEQUES (PDCs)
GUIDELINES
i) Number of cheques to be obtained: 60 PDCs or number of cheques covering the full
repayment period, whichever is less should be obtained. Cheques should be scrutinized to
ensure that these are properly filled in. The 'Crossing Seal' would be required to be put on
the face of the cheque before keeping them in custody.
ii) Date of PDCs: The cheques should preferably be dated prior to the 7th
of every month.
266
iii) Custody: PDCs should not be retained alongwith the security documents to avoid
unnecessary handling of documents. These should be retained by the Asst./Deputy
Manager (Advances) in joint custody with Manager of the Division or Accountant or Cash
Officer and placed in a fireproof safe/locker.
iv) Handling of cheques returned unpaid: Should any cheque be returned unpaid for want of
sufficient funds, the borrower should be immediately contacted. The cheque should be
represented within a period of three days of its having been returned unpaid on a written
request of the borrower. In the event of the borrower failing to deposit the amount of the
cheque, the undernoted procedure for initiating legal action under Section 138 of the
Negotiable Instruments Act, 1881, should be initiated:
Steps to be taken when a cheque is dishonoured on account of
(a) insufficient fund
(b) closing the account,
(c) stop payment of the cheque (on account of insufficient fund).
Step 1
When a cheque is dishonoured the branch has to give a notice in writing to the drawer
within 15 days. Enter in a separate register for this purpose and monitor.
Step 2
If drawer fails to make the payment of the said amount of money to the Bank within 15 days
of the receipt of the notice mentioned in Step-1, proceed to
Step-3.
267
Step 3
File a complaint before the Metropolitan Magistrate or First Class Magistrate, within one
month from the date of cause of action.
Example: Cause of action arose on 01.01.2003, under Step-2, (that is failure to pay within
time mentioned there) file the complaint on or before 31.01.2003.
Step 4
During the pendency of the complaint if the drawer desires to compound the offence,
branch can withdraw the complaint on receipt of the amount of the cheque, interest, legal
cost and other expenses.
It may, however, be noted that the initiation of legal action is a measure of last resort and all
efforts should be made to contact the borrower to regularize the position. However the one
month time limit shall not be allowed to be exceeded under any circumstances, (except
under instructions from the Controlling Office).s
PETRO CREDIT
1. Target Group
: Retail Outlets (RO) of petroleum products of Reliance Industries
Limited(RIL).
2 Eligibility
: RIL plans to set up 5500 retail outlets for their petroleum
products on “Dealer – owned & Dealer – operated”(DODO) basis
in addition to “Company-owned &dealer
operated”(CODO)outlets . The Bank has entered into an MOU
with RIL for a tie – up arrangement for financing their retail
outlets
Corporate and non – corporates having dealership appointment
letter from RIL are eligible
268
3 Purpose
: To purchase land / to set up infrastructure required / to
set up shops/eateries /ATM / internet kiosks etc.
4 Type of facilities
:
Term Loan / Cash Credit
5 Quantum of Finance
: TL – Maximum Rs.100 lacs
CC – As per eligibility
For DODO model – 75% of cost of stocks of petroleum or 4 days
cost of sales of petroleum, whichever is lower.
For CODO model – 75% of cost of stocks of petroleum
For stocks of other items such as tyres, spares, and other related
products/services as specified by Reliance, the credit
requirements need to be assessed accordingly.
6 Margin
: 15 to 25 % for TL
25% for WC
7 Rate of Interest
: For TL of 84 months and cash credit
Floating rate – 3% below SBAR with monthly rests or
. Fixed Rate - 9.30% with monthly rests for TL of 60
months and rate to be reset every 2 yrs
8 Security:
- Primary
- Collateral
:
i) Mortgage of land
ii) Hypothecation of all assets created out of
Bank finance
i) For dealers with a satisfactory track record of
3 years in any business
269
9 Processing fees 0.50% of TL and Rs.250/- per lac for WC
10 Repayment
For term loan
For fixed rate of interest -:maximum of 54 EMIs starting after 6
months from the date of first disbursement.
For floating rate of interest :- Maximum 78 EMIs starting after 6
months from the date of first disbursement
For Cash Credit
Repayable on demand and renewable every year
11 Documentation : � Revised C&I documents
� An undertaking from the borrower that he will not obtain
any further loans for petro-retailing business without prior
written permission from the Bank
� A tripartite agreement between RIL, their dealer and the
Bank for RIL to provide support to the Bank in the event of
default by the dealer to the Bank
�
12 Special features
: � Pre-payment charge: - As per extant instructions.
No charge if the fixed rate TL is paid in full in case of upward
resetting of interest rare
� Insurance of assets acquired out of Bank finance for full
market value to cover all risks has to be obtained
Product highlights:
RIL standardized project reports for different types of Retail Outlets (RO) depending on location. The
capacity of the different ROs will be 2 and 3 dispensers only. The maximum projected sales for an RO
with 2 dispenser will be 50kl of motor spirit and 300kl of High Speed Diesel per month and 50kl MS
and 500kl of HSD per month for an RO with 3 dispensers. each dispenser will have a storage capacity
of 20kl of MS and 40kl of HSD.
270
The project cost of an RO will be around Rs.60 to 70 lacs excluding cost of land and working capital
requirement of Rs.10 lacs. Security deposit is payable by the RO to RIL
Marketing tips:
RIL is in the process of selecting dealers for retail outlets for selling their petro products. RIL plans to
open 5500 retail outlets in the coming 3 years of which 2000 will be set this year. A list of such
selected dealers will be provided by RIL and these leads will have to be pursued for booking business
under this product.
STATE BANK OF INDIA _____________________ BRANCH
APPLICATION CUM INTERVIEW FORM FOR FINANCING OF PETROLEUM RETAIL
OUTLETS UNDER “PETRO CREDIT”
Name of the unit
Address of the unit
Phone No
Fax No
Email/Website
Premises owned
Address of Regd. Office in case of
Corporates
Premises Owned/Rented
271
Address for correspondence
Phone No
Fax No
Email/Website
Premises Owned/Rented
Other Services being provided
Year of Commencement of Business
Experience in the line of activity
Constitution
Details of reconstitution in the past three
years
Details of Proprietor/Partners/Directors
Name & Qualifications Age PAN Residential
Address
Phno/Mobile NetWorth*
* Opinion report on the bank’s prescribed format should be prepared
Details of existing banking arrangements:
Name of the
Bank/Branch
Facility Limit Outstanding Banking since
272
Details of Associate/ Sister/Identical firms:
Name of the unit Name of the
Prop/partners
Banking with Limit Outstandings
Details of registration under Shops &
Establishment Act / Sales Tax Act/ Any
other Act
Position regarding Statutory assessment
under IT/Sales Tax/Any other Year upto
which assessment completed
Credit Facilities required
Fund based Limit required Non fund based Limit required
Cash credit (incl of
bill/chq purchases)
Letters of Credit, if any
Term loan Bank Guarantees if any
Total Total
For Term loans – Details of assets to be acquired (pl enclose detail lists if necessary
Description Details of the
supplier
Cost Time schedule for
completion
Need for proposed
Expenditure
273
Cost Amount Means Amount
Land & Buidling Own funds
Equipment
(proforma invoice to
be enclosed)
Other loans
(specify source)
Other assets Bank loan
Total Total
Any other information(including specific reasons for Letter of Credit /Bank Guarantee)
274
BUSINESS INFORMATION
Nature of activity (strike out whichever is
not applicable)
Trader(wholesale/retail) Business Enterprise /
Prof & Self Employed / Transport Operator
(State also whether C & F
/Franchisee/dealership / distributorship/
stockist/profession/line of service etc)
In case of C & F / distributorship etc
arrangement is valid upto
Requirement of Statutory licenses /
approvals Give full details
Details of suppliers / principals
Seasonality of activity (specify peak & off-
peak periods)
Terms of Purchase/Procurement
Domestic Imports
% of Credit purchases to total purchases % %
Period of credit enjoyed Months Months
Average level of Sundry Creditors Rs. Rs.
Purchases under LC included above Rs. Rs.
Estimated value of remittances to suppliers by DD/TT p.a.
Requirement of stocking
Average stock holding Rs.
Availability of Storage facilities /address
thereof
Rented/owned
Marketing arrangements
Availability of tie-up arrangements
Major buyers/consumers
Level of competition
275
Major competitors
Competitive advantage of the unit
Terms of Sales
% of Credit Sales to total sales Domestic
%
Period of credit given Months
Average Receivables level Rs.
276
Performance Parameters Past/projected
Past three years Projections
31.3.. 31.3… 31.3… 31.3… 31.3…
Sales/Income
Net Profit
Depreciation
Cash Accrual
Tangible Net Worth
TOL/TNW
For term loans, please enclose projected profitability statements covering the period of
repayment
Details of Security offered
Primary
Collateral
(i) Immovable Property
Description of
Property
Name of the Owner Value of the
Property
Basis of valuation
(ii) Liquid Securities
Description Name of the
Owner
Face Value When Acquired Present value
Details of the Guarantor where applicable
Name of the Guarantor
& Address
Age Qualification Networth Banking with
277
I/We declare that the information given in the application from are true, correct
and complete and that they shall from the basis of any kind of facility State
Bank of India may decide to extend to me/us. I/we shall furnish all other
information that may be required by the Bank in connection with my
application. The information may also be exchanged by you with any agency
you may deem fit. You may take appropriate safe guards / action for recovery
of bank dues including publication of defaulters names in website/submission
to RBI. I/We confirm that I/we have no borrowing arrangements for the unit
with any bank except those indicated in the application. I / We confirm that I /
We are net defaulter of any bank / any financial institution I/We confirm that
there are no over dues /statutory dues owed by me/us and I/WE have/ had no
insolvency proceedings against me/us nor have I/we ever been adjudicated
insolvent. I/We undertake to abide by the Rules and Regulations of State Bank
of India in respect of the facilities being extended to me/us.
Signature of Borrower
Date:
Place: Name of the Interviewing Official
List of documents to be attached
1. Partnership deed in original(to be returned) and a copy thereof 2. Memorandum & Articles of Association with certificate of Incorporation in original(to
be returned) and copies thereof
278
3. Copies of the relevant licence, documents pertaining to ownership/tenancy/lease agreement in respect of premises where activity will be carried out / service or trade related agreements etc..
4. Latest copy of Income tax returns/Sales tax assessment order etc. 5. Statement of account from the existing banker for last 6 months 6. Copy of Title deeds relating to collateral security being offered 7. Photocopies of PAN card of partners/Directors wherever available 8. Copies of balance sheets for the past three years (audited wherever applicable) 9. Statement of personal assets and liabilities of
Proprietor/Partners/Directors/Guarantors 10. Photographs of Proprietor/Partners/Directors/Guarantors
279
APPRAISAL
Name of unit/borrower: Segment: SBF/C&I
Sector: Priority/nonpriority
Assessment of Working Capital/Term Loan
1. Performance & Profitability:
(Rs. In 000s)
Past Projected
31.0
3…
31.03… Years Current
year(est)
31.03..
Next
year
31.03…
31.03
…
31.03
…
31.0
3…
a) Sales/Income
b) Other Income
c) Total Income
(a+b)
% increase in ‘c’
d) Expenses
e) Taxes
f) Net profit (c-(d+e))
g) Depreciation
h) Cash Accruals
(f+g)
i) TL repayment
j) TOL/TNW
k) NWC
l) Current Ratio
m) DSCR (Gross)
280
Credit score wherever applicable:
2. Working Capital Required Rs
Estimated average stock holding at any one time
Estimated Average receivable outstanding at any one
time
Less Estimated average credit enjoyed on purchases
Working Capital Required (1)
3. Sources from which required Working Capital would
be met:
Net Working Capital in Business (NWC)
Bank Finance Recommended
Other sources
(2) (A)
OR
….. % of Annual Turnover (B)
Working capital Assessed/recommended
A or B above whichever is more i.e.
* Assessed Working Capital @ ….% of PAT
Stand by line of credit recommended @…….% of
above
Concessions in service charges proposed if any and
281
the Justification thereof
Term Loan:
Details of Fixed
assets
Cost price/estimate
(incl.taxes)
Own funds Bank Finance
Land
Building
Equipment
Others
Total
Comments on Debt/Equity:
Comments on DSCR (in brief):
c. Computation of LC limits for WC
Total Purchase of stocks
Purchase of Stocks under LC
Average monthly purchase of stocks (A)
Average holding of imported stocks
Average usance period (B)
Lead time and transit period (C)
282
Total of (B) and (C) = (D)
The requirement of LC limit (A) x (D)
Limit recommended
b) Assessment of BG limit
Outstanding BGs as on
Add: BGs required during the period
Less: Estimated maturity/cancellation of BGs
during the period
Requirements of BGs
Recommended BG limit
Brief comments on limits recommended
283
Terms and Conditions of Sanction
a. SECURITY
Facility Primary Collateral Guarantee
WDV Name
MV NW
As on
Valuation dated
Description of collateral security :
b. Deviation from existing security (if any)
c. MARGINS : FOR EACH FACILITY AS APPLICABLE)
Cash Credit : Existing Proposed
Stocks
Receivables (Cover ---
days)
Letter of Credit
BG
Term loan
d. RATE OF INTEREST :
facility Pricing
e. REPAYMENT SCHEDULE :
f. INSURANCE
g. SUBMISSION OF STOCK STATEMENTS
h. INSPECTION
j. PROCESSING FEE
j. UPFRONT FEE
284
k. CONCESSIONS IN SERVICE CHARGES
Appraised by Assessed by Sanctioned by
Signature
Name :
Designation
Date :
State Bank of India,
______________ Branch
285
ANNEXURE TO APPRAISAL
ANALYSIS OF BALANCE SHEETS
Liabilites 20 / 20 / 20 /
State Bank of India
Other Banks
Sundry creditors
Expenses
Loans
Other Liabilites
Total Current liabilities (A)
Term Loans
Others
Total Deferred liabilities (B)
Capital & Surplus (C)
Total liabilities (A+B+C)
Assets 20 / 20 / 20 /
Cash
Investments
Stock
Others
Total Current Assets (D)
286
Net fixed Assets (E)
Miscellaneous assets (F)
Intangibles (G)
Total miscellaneous assets H =
(G+F)
Total assets (G+|E+H)
Working capital surplus/deficit (current assets – current liabilities) Rs. …………….
Tangible Net Worth (C-G) … …. ……… Rs. ……………
Capital Base :
1. Total liabilities/Tangible Net worth (Ratio) …………
2. Sales / Tangible Net Worth …………
Profitability
3. Net Profit/Sales (Ratio) …………
4. Net Profit/Total capital employed (Ratio) …………
(including current and deferred liabilities (Ratio) …………
5. Net Profit/Proprietor’s capital employed (Ratio) …………
Current Position : As on ………………….
6. Stock about ………….. month’s sales 7. Sundry Debtors about ………….. months’ sales 8. Sundry Creditors about ……………. Month’s purchases
287
288
AGREEMENT
This agreement (the "Agreement") is made at ____________ on this _ day of ____ 200 [ ].
AMONGST :
......................................................................................., a corporation incorporated and
carrying on business in India as a Scheduled Bank amongst other places at ....... (hereinafter
called the "Bank", which expression shall, unless repungnant to the context thereof, mean
and include its successors and permitted assigns), the party of the FIRST PART;
AND
Reliance Industries Limited, a company incorporated under the provisions of the
Companies Act, 1956 and having its registered office at Maker Chambers acting through its
duly authorized representative _____________ (hereinafter called the "RIL", which
expression shall, unless repugnant to the context thereof, mean and include its successors
and permitted assigns), the party of the SECOND PART;
AND
289
*Mr./Ms.M/s. _______________________, * a company incorporated under the provisions of
the Companies Act, 1956 / a partnership concern / a sole proprietorship concern having its
registered office / office at ______________________ acting through its duly authorized
representative / partners / sole proprietor _______ (herenafter called the "Borrower", which
expression shall, unless repungnant to the context thereof mean andinclude its successors /
successors-in-interest / legal heirs, representatives and permitted assigns), the party of the
THIRD PART.
[*Delete which ever is inapplicable]
Whereas RIL is interested in the setting up and running of retail. outlets for the sale of its
products inter alia being Motor Spirit, High Speed Diesel, Lubricants and Auto Liquified
Petroleum Gas (the "Products") at various places in India.
AND Whereas the Borrower has been selected for grant of dealership by RIL vide LOI dated
_____ which has been issued by RIL and duly received and accepted by the Borrower and
the Borrower & RIL has already entered into dealership agreement Dated ................ (the
"Dealership agreement") with the Borrower.
AND Whereas the Borrower owns a piece of land bearing No. ____________ admeasuring
about _________ situated at _______________ (the "said Land") and is bounded as under :
On the North : ___________
On the South : ___________
On the East : ___________
On the West : ___________
And Whereas the Borrower has agreed to run a retail outlet for the sale of Products at the
said Land (hereinafter called the "Retail Outlet").
290
And Whereas towards construction of the Retail Outlet, payment of security deposit in terms
of clause if the "Dealership Agreement and initial operational expenses of the Retail Outlet,
the Borrower requires funds and thus has requested the Bank ot provide the Borrower with
credit facilities.
And Whereas the Borrower has executed lease deed dated _________ for the Retail Outlet
i.e. the said Land and the structure constructed or to be constructed thereon in favour of RIL.
And Whereas the Borrower has requested the Bank to provide it with the credit facility in a
sum of Rs. ___________________ /- (Indian Rupees facility in a sum of Rs.
_____________ (INdian Rupees ________________________only) (hereinafter collectively
called the "Credit Facilities") for the purpose of construction over the said Land, making the
security deposit to RIL and meeting the working capital requirements.
And Whereas relying upon the representations made by RIL and the Borrower in this
Agreement, the Bank has agreed to grant the Credit Facility to the Brorrow on the terms and
conditions in this Agreement.
NOW IT IS HEREBY AGREED BY AND AMONG THE PARTIES HERETO AS FOLLOWS :
1. The Bank agreed to grant to the Borrower the Credit Facilities, upon the terms and subject to the conditions hereof and upon/of the terms and conditions of the loan
agreements, overdraft agreement, mortgage deed, instrument of hypothecation, letter of pledge, demand promissory notes, promissory notes, receipts acknowledgement of debt
and securities, personal guarantee and other guarantees and security, deeds and documents executed/to be executed provided/to be provided between/by the Borrower
and/to the Bank ("Credit Facilities Documents"), for an amount of Rs. ____________/- (Rupees _______________________________________________only) an overdraft
facility towards working capital for a sum of Rs._____________/- (Indian Rupees
__________________________ only).
2. The Borrower hereby agrees and undertakes to execute all the Credit Facilities
Documents in the form and manner as may be required by the Bank from time to
time.
3. The entire amount of the Credit Facility provided by the Bank to the Borrower along
with interest, fees, charges and expenses due thereon shall be repayable by the
Borrower to the Bank in accordance with the provisions of the Credit Facility
Documents.
291
4. Not withstanding anything to the contrary contained in this Agreement and/or any
other agreement executed/that may be executed between the Bank and the
Borrower, and / or the Credit Facility Documents, the Credit Facility and all amounts
outstanding there under are/shall always be payable by the borrower to the Bank
forthwith on demand beind made by the Bank, which the Bank shall be entitled to
make, without any cause or reason or default by the Borrower, at its sole and
absolute discretion.
5. The Borrower shall execute and/or cause to be executed at its own cost and expense
such agreements, undertakings, instruments and forms as may be required by the
Bank from time to time and in the form, manner and substance satisfactory to the
Bank for creation/perfection of any security/further security by way of mortgage,
hypothecation or otherwise over the assets/properties belonging to the Borrower as
the Bank may require, from time to time including without limitation mortgage over
the immovable assets of the Borrower, hypothecation of the Products and book
debts/ receivables in favour of the Bank.
6. RIL hereby represents, agrees, warrants and undertakes that unless the Bank
expressly otherwise authorize RIL in writing :
i. RIL shall pay all amounts due and payable by RIL to the Borrower on account
of volume incentives (presently @ Rs.250/kl of all products for volumes in
excess of 125 kl pm) and all other payments that may be paid/made by RIL to
the Borrower by whatever name called (collectively called the "Dealer Dues"),
directly to the account bearing no. _________________ of the Borrower
maintained with the Bank (the "Dealer Account") or to such person or account
as may be directed, in writing, by the Bank from time to time; Borrower hereby
irrevocably agrees for such payment being made to Dealer account.
ii. RIL shall not terminate the dealership agreement with the Borrower for the
Retail Outlet or cease operations at the Retail Outlet unless written notice of
such intention to terminate the dealership agreement has been given to the
Bank simultaneously when RIL gives notice to the Dealer about termination.
iii. RIL shall not refund any part of the security deposit or any other deposit or
amount of any nature whatsoever to the Borrower except to such account and
to such person (including the Bank) as may be required by the Bank and in the
manner directed by the Bank in writing.
292
iv. RIL shall, in the event of termination of Dealership with Borrower, pay the
amount of rent for the Retail Outlet @ Rs.100/- per kl of all products or
Rs.10,000/- per month whichever is more into the Dealer Account. The Bank
shall be entitle d to appropriate this amount towards the outstanding amount
due in respect of credit facilities.
v. RIL can modify any material terms and conditions of the Dealership agreement
only with prior consent of the Bank which consent shall not be unreasonably
withheld. If the Bank does not respond to the notice of RIL to the Corporate
Centre of SBI, seeking such consent within 10 days of notice seeking such
consent, it will be deemed that SBI has consented for such modification.
vi. RIL shall not handover possession of the Retail Outlet to the Borrower (other
than as a dealer) except with the written permission of the Bank.
7. In the event the Bank intimates to RIL that the Borrower has committed any default
under the Credit Facility Documents and / or in repayment of any amount due and /
or payable under the Credit Facility, and the said dealership agreement has not been
terminated, RIL shall:
i. continue to supply the Products to the Borrower at RIL's normal sale price.
ii. raise Debit Notes on the Borrower with each sales quantity @ Rs. 150 per kl of
all products for which the Borrower hereby expressly authorizes the RIL.
iii. pay the amount collected from the Borrower towards Debit Notes to the Bank or
such person or such account (including Dealer Account) as the Bank may
direct, in writing, and the Bank shall be entitled to adjust the same towards the
amount outstanding under the Credit Facilities.
8. In the event the Bank intimates to RIL that the Borrower has committed a default
under the Credit Facilities Documents and / or in repayment of any amount due and /
or apyable under the Credit Facility and such default has not been rectified for a
period of 3 (three) months and the Bank requests RIL to terminate the dealership
agreement, RIL, no later than 30 (thirty) days from the date of receipt of notice in this
regard from the Bank (such notice the "Default Notice"), shall stop supplying the
293
Products to the Borrower and shall terminate the dealership agreement with the
Borrower. The decision of the Bank as to whether the Borrower has defaulted or not
shall be final and binding upon RIl and the Borrower.
9. That in the event RIl terminates or proposes to terminate the dealership agreement
with the Borrower, for any reason other than in accordance with Clause 8, RIL shall
intimate such termination to Bank simultaneously when RIL give notic eto Dealer
about terminate of the dealership.
10. That upon the termination or expiry of the dealership agreement/dealership of the
Borrower, for any reason, including in terms of Clause 8 and / or 9 above.
i. All amounts outstanding under the Credit Facilities shall forthwith become due
and payable sby the Borrower to the Bank
ii. RIL shall pay all the amounts payable by RIL to the Borrower (including
Security Deposit), on whatsoever account, net of RIL's dues till the date of
termination or beyond, directly to the Bank or the Dealer Account as may be
required by the Bank in writing.
iii. RIL shall provide all assistance to the Bank to enforce/foreclose the mortgage
over the retail Outlet and hypothecation over the Products in favour of the Bank.
iv. Upon successful enforcement/foreclosure of the mortgage by Bank, if the Retail
Outlet is to be sold in pursuance of the enforcement of mortgage of the Bank
over the retail Outlet in favour of the bank, RIL agrees to purchase the same at
the value not less than amount outstanding under the Credit Facilities plus
maximum three month interest (excluding overdue interest and penalty), and to
apy the said amounts to be Bank.
The said period of 3 months shall commence from the date on which the entire
amount under the term loan becomes due and payable by the borrower to the Bank,
pursuant to the acceleration of the term loan by the Bank, as per the terms of the
Credit Facilities document or otherwise. It is understood by the parties that the
enforcement/foreclosure of the mortgage shall be through Court of law / DRT and RIL
shall be entitled to purchase the said retail outlet which includes landk, building and
machinery/equipments, if the Corut/DRT/its official permit/allow RIL to purchase the
same and in respect of such sale to RIL, the cost of the sale i.e. Stamp Duty and
294
Registration Charges etc. shall be borne by RIL. However, RIL shall make all efforts
to purchase the same through Court/DRT for the value not less than stated above.
Notwithstanding anything to the contrary contained in the Dealership Agreement,
Lease Deed or any other agreement or understanding that may be executed or
reached not or at any time in future, between the borrower and RIl, RIL hereby
agrees that the Lease Deed shall stand terminated in the event of failure of the RIL to
remedy breach under this clause within a period of thirty days from the date of the
notice in wirting from Bank informing RIL of any breach of this agreement or default
of RIL observing any of the above terms and conditions of this agreement. Such
termination of the lease deed will entitle the Bank to enforce the mortgage free of any
encumbrances rights created in favour of RIL and sale of the said land, building and
equipment/machinery owned by Borrower will be without the leasehold rights in
favour of RIL, and the purchaser will get good title to the said land, building,
machinery/ equipment, when the said mortgage is enforced by the Bank.
11. The Borrower hereby confirms that on termination of dealership agreement /
dealership of the Borrower, the Borrower shall sell all the Products then lying in stock
to RIL at the price the same were supplied to it by RIL less any commission/incentive
paid thereon to the Borrower by RIL and all amounts payable by RIL to the Borrower
for the same shall be paid by RIL to the Bank.
12. That in the event, the Borrower has committed a default under the Credit Facilities
Documents and / or in repayment of any amount due and / or payable under the
Credit Facility and / or on termination or expiry of the dealership agreement, the Bank
shall be fully and duly entitled to enforce the mortgage over the Retail Outlet as well
as any and all other security that may be provided for the Credit Facilities by the
Borrower and / or any other person and RIL will assist the Bank in enforcement of
such security.
13. RIL hereby agrees and undertakes that RIL shall act on the undertakings given
herein above notwithstanding any contrary instructions issued by the Borrower in this
regard.
14. In consideration of the Credit Facility being granted by the Bank to the Borrower, the
Borrower hereby irrevocably and absolutely represents, warrants, convenants and
undertakes with the Bank and RIL that :
295
i. The Borrower is the absolute and sole owner of the said Land and the said
Land is in its lawful possession and the said land is free from all encumbrances,
mortgages, liens, arrangements, injunctions, notifications, acquisitions, prior
agreements to sell, prior sales/leases and it is free to deal with the said Land in
any manner it may deem fit;
ii. The original of title deeds of the said Land are in lawful possession of the
Borrower and the Borrower shall deposit the same with the Bank with an intent
to create mortgage over the said Land in favour of the Bank, on or before the
disbursal of any amount under the Credit Facilities or as may bee otherwise
agreed by the Bank;
iii. The Borrower shall create mortgage over the said Land and all construction and
improvements made thereon and machinery affixed to the earth thereat from
time to time shall also stand mortgaged in favour of the Bank. However such
mortgage shall not extend to any equipment belonging to RIL'
iv. The Borrower shall keep the Retail Outlet i.e. the said Land and construction,
and improvements made thereon and machinery affixed to the earth thereat
and the Products fully and comprehensively insured at all times, with the Bank
as the Loss payee;
v. The said Land can be used for setting up the Retail Outlet;
vi. The Borrower confirms and certifies that though the Borrower is the owner of
the said Land and shall also carry out construction thereon but since the said
Land and the construction thereon has been/shall be leased by the Borrower to
RIL, the Borrower is and shall at all times be using and occupying the Retail
Outlet as a user and at the will and pleasure of RIL and forthwith on receipt of
any notice by RIL, the Borrower shall remove itself and all its employees and
representatives from the Retail Outlet, without any demur, protest and delay.
Provided always on such removal Borrower shall not remove any of the
equipment belonging to RIL or any of its furniture, improvements, stocks, stocks
of Products, equipment, items, records, and the like, and shall leave the same
as on the date of receipt of the said notice from RIL;
296
vii. The Borrower irrevocably directs, instructs and authorizes RIL to do all acts,
deeds and things as RIL is required to do in accordance with this Agreement
including but not limited to termination of the Dealership Agreement and credit
the amount of Dealer Dues only to the Dealer Account or any other account or
pay the same to such person (including the Bank) or as may be directed, in
writing, by the Bank from time to time, and in no other manner notwithstanding
anything contrary contained in this Agreement and/or the dealership agreement
and/or any other agreement/document that may be executed now or in future
by / between RIL and the Borrower.
viii. The Bank, without prejudice to any of its other rights, shall be entitled to restrict
and/or prohibit the Borrower from operating and/or making any withdrawals
from the Dealer Account, without any prior or post notice to the Borrower, as
and when the Bank may so deem fit, at its sole and absolute discretion, and
from time to time and the Bank shall not be liable for dishonour of any
cheque/payment instrument/instruction resulting from such restruction and / or
prohibition.
ix. The Borrower shall under no circumstances discontinue operations at the Retial
Outlet unless the dealership agreement is first terminated by RIL;
x. The Borrower hereby irrevocably authorizes RIL to do all acts, deeds and things
in accordance with the terms hereof, notwithstanding anyinstructions to the
contrary that it may have given/may give in future, to RIL;
xi. In the event Default Notice has been served by the Bank on RIL, any Products,
for which payment has been made by the Borrower to RIL but not supplied by
RIL, RIL shall not supply the same to the Borrower and shall hand over such
payment directly and only to the Bank;
15. Until credit facility/any of the Credit Facilities are available to the Borrower and till all
amounts there under or arising there from have been paid in full to the Bank, to the
satisfaction of the Bank, the Bank shall have a first and paramount lien and a right of
set-off on all bank balances, including but not limited to amounts lying in the Dealer
Account, fixed deposits with the Bank, property, assets and the like of the Borrower
that are or may come into possession of the Bank from time to time, irrespective of
them or any one or more of them being held in safe custody by the Bank or
otherwise, and the Bank shall also have a right to get any or all of them registered in
the name of the Bank or its nominees.
297
16. The term of this Agreement shall come into force from the date of this Agreement
and shall continue in full force and effect till such time any amount remains
outstanding under the Credit Facility or the Credit Facility remains available to the
Borrower.
17. This Agreement shall not be amended, altered or modified expect b y an instrument
in writing expressly referring to this Agreement and signed by all the parties hereto.
18. If at any time, any provision of this Agreement is or becomes illegal, invalid or
unenforceable under the applicable law or judicial/administrative / governmental
directions, neither the legality, validity nor enforceability of the remaining provisions
of this Agreement shall in any way be affected or impaired thereby.
19. All approvals internal and corporate have been taken by the Borrower for availing of
the Credit Facility and for execution of this Agreement and the Credit Facility
Documents and creation of mortgage over the said Land and creation of security
over its other assets.
20. The provisions of this agreement are without prejudice to any right that the Bank
has/may have, to recover its dues outstanding under the Credit Facility from the
Borrower and/or to enforce the security created/that may be created in favour of the
Bank, in accordance with the Credit Facility Documents and/or in law.
21. Notwithstanding anything to the contrary contained in the Dealership Agreement or
the Lease Deed or any other agreement or understanding that may be executed or
reached, now or at any time in future between the Borrower and RIL, RIL and the
Borrower shall act in accordance with the terms of this agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed the
day, month and year first above written.
Signed and Delivered by the Bank Signed & Delivered by RIL
through through
Authorized Signatory Mr. ________ Authorized Signatory Mr.
___________
298
Signed & Delivered by the Borrower
through
Authorized Signatory Mr. ________
Signed & Delivered by the Land Owner
through
Authorized Signatory Mr. ________
DEALER FINANCING
Tie-up with Bharat Petroleum Corporation Limited (BPCL)
299
To Extend Working Capital Facility for Petroleum Dealers
BPCL is engaged in the business of refining and distribution of petroleum products through
its 6000 strong network of petroleum dealers. Bank has entered into a tie up with BPCL to
provide working capital finance to all their dealers.
02. According to BPCL most of these dealers are under stocking resulting in inefficiencies in
supply chain. A major reason for this has been cited as lack of credit. This presents us with
an opportunity to extend finance and garner significant business. Each of these dealers
requires funding for 3 to 5 days of stocks, i.e. Rs.10.00 lakhs approximately, on an average.
03. BPCL would circulate the terms and conditions of the arrangement and schedule of
charges (attached herewith as Annexure-I and Annexure-II respectively) to all its dealers.
Under the tie-up, BPCL shall extend the following comforts to the Bank:
a) Provide duly filled up “Opinion Report cum Comfort Letter” (format attached herewith as Annexure-III) for every Petroleum Dealer willing to take finance from SBI.
b) Intimate SBI about termination of a Petroleum Dealer’s dealership or any other disciplinary action against a petroleum dealer like suspension, as soon as the decision is taken about it. Such intimation shall take place by writing letter simultaneously to the financing branch and Local Head Office of SBI.
c) In case of petroleum dealers availing working capital limit from SBI, BPCL will not supply goods on credit basis, either partly or fully and such supplies will be made against advance payment only.
d) In case of default by Petroleum Dealers (default shall be defined as inactivation of account or non-payment of interest for more than 30 days), BPCL will make future supplies to the dealer only if payments are received by BPCL in advance from the cash credit account of borrower with SBI, BPCL shall put moral pressure on Petroleum Dealer to pay back his over dues and reactivate the account with the bank.
e) In the event of default by the Petroleum Dealer (the letter addressed by the bank to the BPCL as to default by the dealer in making payment of dues etc is sufficient conclusive proof of default by the Petroleum Dealer and BPCL shall undertake all such activities required of BPCL to help recover the dues), Bank will seize such goods of dealers financed by bank and BPCL shall purchase the said seized goods from bank, subject to the goods meeting the quality parameters, at realizable price.
f) Not withstanding anything contained in the agreement between BPCL and the Petroleum Dealer, BPCL undertakes, in case of default and or termination of such dealership, not to repay any dues (such dues shall include security deposit also) to the borrower without taking prior approval of Bank. BPCL would make all such amount available to the financing branch of Bank towards recovery of dues, if any, after setting off all moneys due to BPCL.
04. As the ticket size of loans will be less than Rs.25.00 lacs, there will be no need for
carrying out CRA for such loans. For all limits above Rs.25.00 lacs CRA exercise has to be
carried out as per extant instructions. The limits can be sanctioned based on their
300
present turnover and inbuilt cushion of 25% (explained in Annexure-I), so as to
account for price increases. Such limits can be availed by the customers both as Fund or
Non Fund Based limits or a combination of both, subject to the exposure being taken are
within the overall sanctioned limits. All documents as per SME Documentation should be
obtained and KYC norms duly complied with.
05. In cases where CRA exercise has been carried out the interest rates to be charged are
as follows:
Rating as per CRA Interest Rates to be Charged
SB 1 and SB 2 0.75% below SBAR, currently 10.00% p.a.
SB 3 and SB 4 0.25% below SBAR, currently 11.00% p.a.
SB 5 0.75% below SBAR, currently 11.50% p.a.
06. All proposals under the tie-up will be handled by SECC/SMECC as the case may be,
where such processing centres are established. This will apply irrespective of turnover
being higher than stipulated Rs.25.00 crores. A simplified application form is attached
herewith as Annexure IV. A format for carrying out appraisal and the interest rate matrix for
arriving at relevant interest rates is attached herewith as Annexure V.
07. The applicable interest rate for such loans can be decided by using the following simple
matrix:
Opinion Report on
Cheques Return
Adverse Opinion Report
on Quality Standards
Interest Rates (Floating-
Linked to SBAR)
Never Never 0.75% below SBAR
i.e.10.00% p.a.
Never Upto twice a Year 0.25% below SBAR
i.e.11.00% p.a.
Upto twice a year Never 0.25% below SBAR
i.e.11.00% p.a.
Upto twice a year Upto twice a year 0.75% below SBAR
i.e.11.50% p.a.
Upto twice a year More than twice a year Not eligible
301
Never More than twice a year Not eligible
More than twice a year Never Not eligible
More than twice a year Upto twice a year Not eligible
More than twice a year More than twice a year Not eligible
The data required for above calculation, is a part of the Corporate Opinion Report to be
provided by BPCL and as such the branches need not collect this data. The detailed format
is attached herewith as Annexure-II.
08. Based on the above, cash credit accounts for the Petroleum Dealers in the area of
operations of the Circle may be opened in appropriate branches as per convenience of the
dealers. Wherever, the branch is CINB enabled, internet banking facilities should be
extended to the dealer which will enable him make free remittances to BPCL. Special care
should be taken to ensure that payments from the cash credit account can only be
made to designated BPCL account maintained with Bank. This restriction will be
applicable irrespective of whether payment is being made using CINB or through cheques or
drafts or STEPS. The designated account of BPCL in which payment is to be made will
be intimated in due course.
09. In case of default by the Dealer (default shall be defined as inactivation of account or
non-payment of interest for more than 30 days), the branch should immediately inform the
local office of BPCL and SME BU at LHO. Under the arrangement, on intimation, BPCL
shall restrict supplies to dealer. They will affect supply only against payment received from
designated Branch of SBI where the dealer’s account is parked.
10. In such cases, dealers would first be forced to regularize their account by making
deposits into their loan account. From the deposits so made, branch can deduct up to 25%
towards adjustment of irregularities in the account and make available 75% for remittance of
BPCL towards further supplies. Once the account becomes normal, regular operations can
be permitted.
11. In case a dealer defaults twice, the Branch should endeavour to discontinue the
borrowing arrangement by asking the dealer to close the account. Intimation about the
proposed plan of action should be sent to BPCL and SME BU at LHO.
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****************************************************************************************
WORKING CAPITAL FINANCE TO DEALERS OF BHARAT PETROLEUM
CORPORATION LIMITED
Purpose To provide working capital facility to Petroleum Dealers
Nature of facilities Cash Credit
Segment SME
Eligible amount of
finance
Upto 80% of working capital requirements for stocks/advances
paid for stocks. Assessment would be based on 5 to 7 days of
turnover taking into account the past turnover of the dealer with
25% cushion for price increase. Past turnover will be made
available by BPCL as a part of Corporate Opinion Report.
Repayment On demand, renewal every year.
Sanctioning Authority As per scheme of delegation of financial powers for working
capital
Rate of interest Interest rates within the band of 10.00% p.a. (currently 0.75%
below SBAR, minimum 10.00%) to 11.50% p.a. (currently
0.75% above SBAR) with monthly rests. In case, at least 50%
collateral can be provided by the dealer, the interest rate can
be reduced on a case to case basis by 50 basis points from
their eligible interest rates, subject to a lower limit of 9.50%
linked to SBAR with monthly rests. In case, the interest is not
paid by the dealer within the period of 15 days, enhanced
interest at the rate of 2% will be levied from the 16th day
onwards with monthly rests.
Margin 20%
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Security a) Primary : Hypothecation of stock/s other assets of the Petroleum Dealer
b) Collateral / Guarantees : Personal Guarantee of dealers Tenure 15 days
Insurance The assets created out of Bank’s finance are to be insured for
full market value, against all risks.
Documentation Revised SME Documents
Review As per Bank’s extant instructions
Processing charges Rs.300/- per lac to be paid in the first year and on renewal
every year.
Others BPCL will provide “Opinion Report cum Comfort Letter” and
other support as detailed earlier.
Remittance Charges • Nil for payment through e-banking platform of SBI
• Rs.100/- transfer when payment made by STEPS
• In case of remittances through any other mode, normal charges of SBI are applicable. However, the branch where the dealer avails the channel financing facility, at its sole discretion, may reduce/waive the same.
Cash handling
charges
• For dealers availing OD upto Rs.5 lacs – Free upto Rs.1 lac/day and Rs.20/lac thereafter
• For dealers availing OD more than Rs.5 lacs – Free upto Rs.3 lac / day and Rs.20/ lac thereafter.
304
Annexure III
Opinion Report Cum Comfort letter (on Letter Head of BPCL)
1. Name and address of dealer 2. Name of key persons and their designations 3. Territory assigned to dealer 4. Year of appointment of dealer 5. Identification Code 6. Range of products stored (please tick)
a. Diesel b. Lubes c. Petrol d. Others (Please specify) ……………………….
Sales through dealer (last two years and current year till date)
Brand Name Unit Sales
(Year till date)
31.03.2006 31.03.2005
Diesel Qty in KL
Value (Rs.Million)
Petrol Qty in KL
Value (Rs.Million)
Lubes Qty in KL
Value (Rs.Million)
Others Qty in KL
Value (Rs.Million)
7. Conduct of Dealer (Past 12 months)
Cheque returns (Please tick)
More than twice a year Upto twice a year Never
Delay in Payments (Please tick)
More than twice a year Upto twice a year Never
Quality related issued (include events like notices for poor quality/adulteration, temporary
suspension)
More than twice a year Upto twice a year Never
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8. Limits recommended (Final decision as per bank’s policy)
9. Peak Limits recommended (Final decision as per bank’s policy)
We hereby confirm that the information given above is true to the best of our knowledge and
shall be treated strictly private and confidential and without any liability on the part of
Company for any credit decision taken by bank and accept the terms and conditions as
started in MOU signed by Bank and BPCL dated :
Name of the Authorised Official :
Mr/Mrs _____________________________ Signature
Designation _________________________
Date : Office Stamp and Seal
306
Annexure IV
STATE BANK OF INDIA
…………………. BRANCH
APPLICATION CUM INTERVIEW FORM FOR FINANCING OF WORKING CAPITAL
FACILITY TO THE PETROLEUM DEALERS OF BHARAT PETROLEUM CORPORATION
LTD (BPCL) UNDER SBI-BPCL TIE UP ARRANGEMENT.
1. Name of the unit
Identification Code :
2. Address of the unit
Ph. No:
Fax No.
Email / Website
Premises owned/returned
3. Address of Regd. Office in case
of Corporates
Premises owned/returned
4. Address for correspondence
Ph. No.
307
Fax No.
E-mail / Website
5. Other business, if any
6. Year of Commencement of
Business
7. Experience in the line of activity
8. Constitution
DETAILS OF PROPRIETOR / PARTNERS / DIRECTORS
Name &
Qualification
Age PAN Residential
Address
Phone /
Mobile
Net Worth
(Opinion report on the bank’s prescribed format should be prepared)
DETAILS OF EXISTING BANKING ARRANGEMENTS
Name of the
Bank/Branch
Faciliity Limit Outstanding Banking since
308
DETAILS OF ASSOCIATE/SISTER/IDENTICAL FIRMS
Name of the unit Name of the
Prop/partners
Banking
with
Limit Outstanding
Particulars of registration under Shops &
Establishment Act/Sales Tax Act / Any
other Act.
Position regarding Statutory Assessment
Under IT/Sales Tax/Any other Year upto
which assessment completed
Distance of the unit from the distribution
point
k.m.
Mode of Transportation
Storate Capacity of the Unit No. of tanks –
k.l.
Mode of payment to BPCL (please
specify)
309
TERMS OF SALES
% of Credit sales to total sales
Period of Credit given
Months
Average level of receivables
Rs.
Range of products : a. Diesel b. Lubes c. Petrol d.
others(Please specify)
Brand Name Unit Sales
31.03.05 (A) 31.03.06(A) 31.03.07(E)
Diesel Qty in KL
Value (Rs)
Petrol Qty in KL
Value (Rs)
Lubes Qty in KL
Value (Rs)
Others Qty in KL
310
Value (Rs)
CREDIT FACILITIES REQUIRED
Fund based Limit required Peak limit required (if any)
Cash Credit
DETAILS OF SECURITY OFFERED
Primary
Colleteral
IMMOVABLE PROPERTY
Description of
Property
Name of the Owner Value of the
Property
Basis of valuation
(Rs./lacs)
311
LIQUID SECURITIES
Description Name of the
Owner
Face Value When acquired Present value
LIQUID SECURITIES
Name of the
Guarantor & Address
Age Qualification Net worth Banking with
I/We declare that the information given in the application form are true, correct and complete
and that they shall from the basis of any kind of facility State Bank of India may decide to
extend to me/us. I/We shall furnish all other information that may be required by the Bank in
connection with my application. The information may also be exchanged by you with any
agency you may deem fit. You may take appropriate safe guards/action for recovery of bank
dues including publication of defaulters names in website/submission to RBI. I/We confirm
that I/we have no borrowing arrangements for the unit with any bank except those indicated
in the application. I/We confirm that I/We are not defaulter of any bank/any financial
institution. I/We confirm that there are no over dues / statutory dues owned by me/us and
I/We have/had no insolvency proceedings against me/us not have I/we ever been
adjudicated insolvent. I/we undertake to abide by the Rules and Regulations of State Bank
of India in respect of the facilities being extended to me/us.
Date :
Place :
Signature of the Borrower
312
Name of the interviewing Official
Designation :
LIST OF DOCUMENTS TO BE ATTACHED
1. Partnership deed in original (to be returned) and a copy thereof
2. Memorandum & Articles of Association with Certificate of incorporation in original (to be returned) and copies thereof.
3. Copies of the balance sheet (s) of the firm / company for past three years
4. Latest copy of Income tax, sales tax assessment order etc.
5. Statement of account from the existing banker for last 3 months
6. Photocopies of PAN card of partners / Directors wherever available
7. Statement of personal assets and liabilities of proprietor / partners / directors / guarantors
8. 2 copies of photographs of proprietor / directors / partners
9. Copies of the relevant license / statutory clearances, documents pertaining to ownership / Tenancy / lease agreement in respect of premises where activity will be carried out / Service or trade related agreements etc.
10. Copy of Title deeds relating to collateral security being offered.
313
Annexure V
APPRAISAL
Segment : SBF/C&I
Sector : Priority / non priority
Name of the unit / borrower :
Assessment of Working Capital (Cash Credit)
1. Performance and Profitability
(Rs.in lacs)
Years 31.03.05(A) 31.03.06(A) 31.03.07(E)
(a) Sales / Income
(b) Other income
% increase in ‘a’
c) Net profit
d) Depreciation
e) Cash Accruals (d + e)
f) NWC
g) Current Ratio
Note : Where the dealearship is not generating adequate profit, appraising official should
examine the feasibility of the unit before recommending the limit.
WORKING CAPITAL REQUIREMENT
a) Estimated Annual Turnover : Petrol
Diesel
Lubes#
b) Required working capital (5 to 7 days
314
average turnover) @ For Petrol/Diesel
#for Lubes
c) Add cushion for price increases
d) Total Working Capital requirement (b+c)
e) Borrower’s margin – 20%
f) Eligible Bank finance (d-e)
g) Recommended limit
@ Depending on the distance of the unit from the delivery point
# For arriving at the finance needed for stocking lubes, the period may range from 1 month
to 45 days, depending upon past trends.
Terms and conditions of Sanction
I. SECURITY
Primary
Collateral
Guarantee Name Net worth
(as on )
II. OTHER TERMS AND CONDITIONS:
Rate of Interest (as per matrix)
Margin (20%)
Tenure 15 days
Insurance The assets created out of Bank’s finance are to
315
be insured for full market value, against all risks
Review
Documentation
Processing charges
Others Opinion report cum comfort letter from BPCL
Submission of stock statements
Inspection
Remittance Charges
Cash handling charges
Concessions in service charges
(if any)
Remarks :
Appraised by Assessed by Sanctioned by
Signature :
Name :
Designation :
Branch :
Date :
RISK MATRIX FOR APPLICABLE INTEREST RATE
Name of the Unit/Borrower :
316
Opinion report on
cheques return
Adverse opinion
report on quality
standards
Interest rates
(Floating-linked to
SBAR)
Applicable rate
Never Never 0.75% below SBAR
i.e. 10.00% p.a.
Never Upto twice a year 0.25% below SBAR
i.e. 11.00% p.a.
Upto twice a year Never 0.25% below SBAR
i.e. 11.00% p.a.
Upto twice a year Upto twice a year 0.75% below SBAR
i.e. 11.00% p.a.
Upto twice a year More than twice a
year
Not Eligible
Never More than twice a
year
Not Eligible
More than twice a
year
Never Not Eligible
More than twice a
year
Upto twice a year Not Eligible
More than twice a
year
More than twice a
year
Not Eligible
Pricing (as per Matrix) :
Available Collateral Security :
( % of loan amount) ____________________________
Effective Interest rate :
Note : Interest rate can be reduced by 50 basis points if collateral securities are
available at least 50% of the loan amount.
317
Share of SBI in inventory funding
Share of SBI as % of total cash credit limit for inventory financing of dealer
If 100% is funded by SBI - 20 marks
If 75% or more is funded by SBI - 15 marks
If 50% or more is funded by SBI - 10 marks
If 25% or more is funded by SBI - 5 marks
If less than 25% is funded by SBI - 0 marks
Score Interest Rate (at SBAR of 11%)
80 or more Marks Minimum 9.50% p.a. (1.50% below
SBAR) linked to SBAR
60-79 Marks Minimum 10.00% p.a. (1.00% below
SBAR) linked to SBAR
40-59 Marks Minimum 10.50% p.a. (0.50% below
SBAR) linked to SBAR
20-39 Marks Minimum 11.00% p.a. (SBAR) linked to
SBAR
Below 20 Marks Application to be rejected
Annexure 4
• Last 12 months Sales
• Next 6 months projections
• Last 3 year Financials (Latest Yr + Last 2 Years Audited) with Schedules
318
• CA Certified Networth Statement of Directors / Partners
• MOA & AOA / Partnership Deed
• LOI issued by Manufacturer in case of a newly appointed dealership
319
Annexure 5
(On the Letterhead of borrowing company)
Date :
To :
The Branch Manager,
State Bank of India
……………………Branch
Dear Sirs,
Distributor Financing Programme
We refer to your letter no _______________ dated _____________ and thank you for
offereing us a credit facility under your Distributor Financing Programme to finance our
purchases from Tata Motors Limited.
We request you to make payments directly to the designated account to Tata Motors
Limited as per the details of invoices provided by them through electronic form. I/We
hereby confirm to pay to you all dues as per these invoice details raised by Tata
Motors Limited on us on the agreed credit terms with you.
We also confirm that all commercial disputes will be settled directly with Tata Motors Limited
and we will pay SBI the full value of Invoices discounted.
Yours faithfully,
(Authorised Signatory with rubber stamp)
DOCTOR PLUS
1. Target Group
: Medical practitioners of any discipline, promoters of hospitals,
nursing homes, pathological clinics, polyclinics, X-ray labs, etc.
2 Eligibility
: � Individuals, partnerships, corporates, trusts with powers
to borrow
� Promoters should be registered practitioners and should
possess minimum qualification to practice in a discipline such as
320
MBBS/ BDS/ BAMS/ GAMS/ BHMS
3 Purpose
: � For purchase of equipment
� For setting up clinic, nursing home, path. Lab, drug
store, ambulances, computers, vehicles, etc.
� Expansion/ renovation of existing premises
4 Type of facilities
: � Medium Term Loan
� Cash Credit
5 Quantum of Finance
: a. In Metro/ urban for Corporates and partnerships only:
Maximum of Rs.10 crores of which a sub ceiling for
working capital limits at
• 10% of total loan amount for up to Rs.1 crore
• 5% of total loan amount for above Rs.1 crore
b. (1) In Metro/ urban for individuals
(2) In Other centres for Corporates/ partnerships/
individuals:
For b. (1) and (2) maximum of Rs.5 crores of which a
sub ceiling for working capital limits at
• 10% of total loan amount for up to Rs.1 crore
• 5% of total loan amount for above Rs.1 crore
c. For Non Allopathic doctors (Unani, Ayurvedic,
Homeopathic): Maximum of Rs.10 lacs of which a sub
ceiling for working capital limits at
• 10% of total loan amount.
6 Margin
: Up to Rs. 10 lacs: 15%
Above Rs.10 lacs upto Rs.5 crs: 20%
Rs.5 crs. – Rs.10 crs: 25%.
7 Rate of Interest : For limits up to Rs.25 lacs: Based on Credit Scoring Model.
321
(See Annexure 2)
Minimum score of 40 on credit scoring model to be eligible for
the loan.
For limits above Rs.25 lacs and up to Rs.10 crores: Pricing will be
based on CRA rating. For CRA Rating below SB 8 will not be
considered. (See Annexure 3)
8 Security:
- Primary
- Collateral
:
Hypothecation of Assets financed by the Bank
No tangible collateral security for loan amounts up to Rs.25 lacs
They are to be covered under CGTMSE. CGTMSE fees to be
borne by the borrower.
For loans above Rs.25 lacs and upto Rs.1 Crore: tangible security
for at least 25% of the loan amount. Alternatively, eligible
accounts may be covered under CGTMSE scheme.
For loans sanctioned to Micro & Small Enterprises above Rs.1
Crore: Tangible collateral security of at least 25% and Personal
guarantee of promoters.
9 Processing fees 0.5% of loan amount – minimum Rs.500/- & maximum
Rs.50,000/-
10 Repayment Minimum DSCR 1.5:1
� Maximum period up to 5 years (including moratorium period):
For buying equipments and expansion/ renovation/
modernization of existing premises
� Maximum period up to 7 years (including moratorium period):
For setting up clinic, nursing home, pathology labs, drug
store and other infrastructure
� Maximum moratorium 12 months
11 Documentation : As per SME documentation
12 Special features
: � Eligibility as per credit scoring model –
Minimum score of 40 for limits upto Rs.25 lacs
For above Rs.25 lacs, CRA model is applicable
322
13 Insurance Insurance of assets purchased out of bank loan and in respect of
vehicles, comprehensive insurance as laid down
14 Inspection Half-yearly inspection/ monitoring to ensure end use of funds
15 Upfront Fee/
Processing
Charges
50% concession on the card rates.
16 Disbursement Operating unit can make multiple disbursements over a period
of 24 months form date of sanction based on requirements. But
schedule of disbursement and purpose has to be specified at
time of sanctioning of loan.
CREDIT SCORING MODEL ( For loans upto Rs.25 lacs)
Name of the doctor/ company / firm -----------------------------------------------------------------
Name of the Chief promoter-----------------------------------------------------------------------------
(i) Personal details of chief promoter:
S.No. Parameter Criteria Marks Max.
Marks
Marks
Scored
323
1. Owning a house
Own 3 3
Not owning 0
2. Academic
qualification
Super specialist 5 5
PG / addl. Qualification 4
Graduate 3
3. Field of practice
Allopathy 5 5
Homeopathy 4
Ayurveda 3
Others (Unani etc.) 2
4. Experience / Practice
> 10years 6 6
5 – 10years 4
3 – 5 years 3
< 3 years 2
324
5. Employment Details
of Spouse / Close
Family Members
Employment Details of
Spouse
Employed
Not employed
2
0
4
Whether any Close Family
Member is a medical
practitioner at the same
centre?
Yes
No
Close Family Member
include
spouse, parents, brother,
sister
and In-laws.
2
0
6. Assessed for Income
tax
Assessed 2 2
Not assessed 0
7. Has Life Insurance
Policy (Surrender
value of Policy (SV) to
loan amount (LA))
SV to LA => 70%
SV to LA => 50%
SV to LA => 30%
SV to LA => 10%
All other cases (including no
LIC Policy)
2
1.5
1.0
0.5
0
2
No 0
8. Loyalty Deposit/Advance
dealing with SBI/SBI
cards
More than 5 years
5
325
3 – 5 years
1 – 3 years
Upto one year
Bonus points for SBI
customers:
Availing one or more
Housing Loans with SBI/
With a PPF or
FD balance of Rs.5 lakhs and
above with SBI
Availing more than one
advance/ deposit products
with
SBI
Availing any one advance/
deposit products with SBI
2.5
2.0
1.5
1.0
2.5
2.0
1.5
Total 32
ii) Business Scoring:
S.No. Parameter Criteria Marks Max.
Marks
Marks
scored
1. Premises where
practicing done
Owned / leased for >5 yrs 3 3
Owned but mortgaged 2
Rented 1
326
2. Operating profit Continuous for > 3 yrs 5 5
(pre – tax) For 2 yrs 3
One for last yr
2
3. Income showing a
rising trend
Last 3 years 5 5
Last 2 years 3
Last year 1
4. TOL /TNW (quasi-
equity to be added to
TNW & reduced from
TOL)
< = 2 4 4
>2 & <=3 3
>3& <= 4 2
>4 & <=5 1
5. Repayment period Upto 5 years 5 5
3 – 5 years 4
5 – 7 years 2
6. DSCR >=2 5 5
>=1.5 & <2 4
>=1 & <1.5 2
<1
0
7. Collateral Value
of Property/ (of TDR
or cash
equivalent offered as
security viz RD/
>=75%
>=50% & <75%
>=25% to < 50%
<25%
13
9
5
3
13
327
Relief Bond, NSC, etc
multiply by 2
and add to the
collateral value)
NIL 0
8 Association with
Reputed
Hospitals/
Medical
Institutions
Associated for more than 10
years
Associated for more than 5
years
Associated for more than 3
years
Not associated
3
2
1
0
3
8 TOTAL
Loyalty:
S.No. Parameter Criteria Marks Max.
marks
Marks
scored
8 Deposits
Advances
dealing with SBI
/ SB cards
Bonus points for
SBI customers
More than 5 years
3 – 5 years
1 – 3 years
Upto one year
HLs / PPF/TDR Rs. 5 lacs
> one deposit/ advance
prdct
Availing any one product
5
3
2
1
5
4
3
10
Total 10
Note: In case of any of the above parameters is not applicable, the scoring should be
normalized out of 75 Applicable.
328
Hurdle Score for each section:
• Personal Details: Hurdle Score 15 out of 32
• Business Scoring: Hurdle Score 20 out of 43
Interest rate matrix & financial decision for loans upto Rs.25 lacs
Score Interest Rate
65 & above 3.25% above Base Rate with a minimum of 10.85%
55 - 64 3.50% above Base Rate with a minimum of 10.85%
45 – 54 3.75% above Base Rate with a minimum of 10.85%
35 – 44 4.25% above Base Rate with a minimum of 10.85%
Below 40 No finance
Annexure 3
For loan above Rs.25 lacs and up to Rs.10 crore:
329
CRA Rating (New Model) Rate of Interest (Base Rate = 7.60%p.a.)
SB1 to SB2 (3.25% above Base Rate) 10.85% p.a.
SB3, SB4 & SB5 (3.50% above Base Rate) 11.10% p.a.
SB6 & SB7 (4.00% above Base Rate) 11.60% p.a
SB8 (4.50% above Base Rate) 12.10% p.a.
* No finance below SB8.
*************************************************************
APPLICATION FOR DOCTOR (+) PLUS
Personal Details
1. Name of the Unit
2. Constitution Individual / Partnership/ Company
3. Address: Business
330
Telephone No. & Mobile Number
Address; Residential
Telephone / Mobile No. e-mail
4. Registration No. of Medical Practitioner
5. Owning a house Own
Own (not mortgaged)
Not owning
6. Academic Qualifications
(medical fields)
Graduate (MBBS/BMS/Other)
PG
Specialisation
7. Spouse Detail Doctor
Employed
Not Working
8. Income Assessed Under IT Yes
No
331
9. Taken Life Insurance Policy Yes
No
332
10. Whether belongs to SC / ST
Minority Community
Male
Female
Ex-Service man
11. Banking with SBI
Details of Deposit A/c
(Including SBI Card)
Since
Loan A/c
Since
Loans Repaid
12. Description of activity
13. Experience in Medical Practice Over 10 years
5 – 10 yrs
3 – 5 years
Less than 3 - 5 yrs
14. Premises where practice is done Owned
333
Leased > 5 yrs (but mortgaged)
Rented
15. Project Details
Cost of Project Amount (Rs.) Means of Finance Amount (Rs.)
Fixed Assets
Working Capital
Current Assets Term Loan
Others
16. Track Record
Year 1 Year 2 Year 3 Year 4 Year 5
Income
Operating Profit (Pretax)
334
17.
18. Amount of Loan required
19. Repayment Period Upto 3 yrs
3-5 yrs
5-10 yrs
20. Collateral Value of Property (TDR or cash
equivalent is offered as security viz. RBI
Relief Bond, NSC etc. multiply cash
equivalent, by 2 and add to the collateral
(value)
Rs.
% of loan
%
21. I / We Certify (i) all information furnished by me / us is true, correct and complete; (ii) I / We
have no borrowing arrangement for the unit with any Bank as except indicated in the application;
(iii) there are no over dues / statutory dues against me / us; (iv) No legal action has been taken
against me / us (v) I / We shall furnish all other information all over information that may be
required by Bank a connection with my application; (vi) the information may also be exchanged by
you with any agency you may deem fit (vii) You, representatives of any other agency as authorized
by you may at any time inspect verify my / our assets, books of account etc. in our business premise
as given above (viii) You may take appropriate safeguards / action for recovery of Banks dues
TOL TNW
(Quasi equity to be added to TNW
and reduced from TOL)
DSCR
335
including publication of defaulters name in web site / submission to RBI, (ix) / We further agree that
my / our loan shall be governed by the rules of State Bank of India which may be in force from time
to time.
Place : __________________
Date : __________________ Signature of Borrower (S)
Documentary proof in the form of originals with self attested copies has to be produced for verification. Originals to be returned and attested copies filed along with application. Data to be attested and furnished only in respect of key promoter.
SBI-SIEMENS MEDICAL EQUIPMENT PLUS
1. Target Group
: Prospective buyers will be identified by Siemens who will refer
the buyers to the branches of SBI. These will be drawn from
doctors in private practice, nursing homes, hospitals, diagnostic
centres preferably those who are banking with us
2 Eligibility
: Individuals / partnerships / corporates / trusts
Commercial viability will have to be established before
sanctioning the loan. Due diligence should be done by the
Branch manager before sanction of the loan.
3 Purpose
: To purchase medical equipment
4 Type of facilities
: Term Loan
5 Quantum of Finance : The cost of equipment on offer by Siemens ranges between
Rs.10 lacs to Rs.10 crs.
336
Loans for non medical practitioners for purchase of equipment
costing upto Rs.20lacs will be treated as SBF advance.
Loans to medical practitioners whose borrowings do not exceed
Rs.10 lacs in urban and metro centres and Rs.15 lacs in rural
and semi-urban centres are also to be treated as SBF advances.
Under this tie up arrangement, all loans upto Rs.25 lacs will be
covered under the Doctor Plus scheme.
Loans over Rs.25lacs will be considered under C&I segment and
will be appraised as per the norms applicable to C&I advances.
Provision for contingencies to the extent of 5% may also be
considered on case to case basis.
DSCR 1.75 Debt Equity 3:1
6 Margin
: 20%
7 Rate of Interest
: As per Doctor Plus scheme
8 Security:
- Primary
- Collateral
:
Hypothecation of assets financed by the Bank
For loans upto Rs.10 lacs – NIL
For loans over Rs.10 lacs – Tangible security for at least
50% of the loan amount
9 Processing fees Waived
10 Repayment
5 to 8 years including a moratorium period not exceeding 1 year
11 Documentation : As applicable to term loans in SBF / C&I segment
12 Special features
: Equipment covered Price range (Rs. in lacs)
337
CT Scan 100 - 400
MRI Scan 200 – 650
Cathlab 220 – 330
Linear Accelerator 400 - 700
B&W ultra-sound 60 - 100
Colour Doppler 150 – 650
X – ray 20 – 350
Ventilator 80 – 130
Ultrasound scanner 15 - 40
Locations to be covered:
New Delhi, Dehradun, Chandigarh, Patiala, Ludhiana, Kanpur,
Lucknow, Jaipur, Jodhpur, Chennai, Bangalore, Hubli,
Hyderabad, Visakhapatnam, Kakinada, Kochi, Trichy , Thrissur,
Thiruvananthapuram, Coimbatore, Kolkatta, Patna,
Bhubhaneswar, Ranchi, Mumbai, Goa, Nagpur, Pune, Indore,
Ahmedabad, Vadodara
Any other location can be added if required.
13 Methodology and
Operation of the
account
Siemens will identify and furnish application to SBI. SBI shall
process the loan application and if found acceptable, the Bank
will sanction the loan within 15 days and convey the sanction to
the borrower and Siemens Thereafter, the borrower will have to
complete documentation and margin requirements Siemens will
then dispatch the equipment directly to the buyer/ borrower
and forward proof of dispatch along with proforma invoice to
the branch. The Bank will have to pay the amount directly to
Siemens by means of a draft or Bankers Cheque within 3 days of
receipt of the proof of dispatch.
Product highlights:
Our Bank is the largest financier for medical practitioners and in order to maintain and further
enhance our product profile to this segment of borrowers, the Bank has entered into a tie up
arrangement with M/s. Siemens Ltd. which is in itself a globally recognized manufacturer of hitec
medical equipment, for financing purchase of their products by medical practitioners, nursing
338
homes, clinics, diagnostic centres, etc. Siemens will identify the prospective buyers and refer them
to the Bank who will consider the proposals on merits and if found acceptable, will sanction the
required term loan .the proceeds of the term loan , together with the margin money component will
be directly forwarded to Siemens after the receipt of the equipment by the borrower within 3 days.
Loans upto Rs.25lacswill be considered under Doctor plus scheme and for amounts above that C&I
norms will apply.
SBI-DENTAL EQUIPMENT PLUS
TIE UP with Confident Dental Equipment Ltd.
1. Target Group
: Qualified dentists with a minimum of BDS degree and qualified
to practice as a medical practitioner
2 Eligibility
: Individuals / partnerships / corporates / trusts
Commercial viability will have to be established before
sanctioning the loan. Due diligence should be done by the
Branch Manager before sanction of the loan.
3 Purpose
: To purchase medical equipment required for dentistry
4 Type of facilities
: Term Loan
5 Quantum of Finance
: Rs.10 lacs maximum
DSCR 1.5
6 Margin
:
Upto Rs.25000/- nil
Upto Rs.5lacs 10%
Over Rs.5 lacs 20%
339
7 Rate of Interest
: Repayable below
3 yrs
Repayable
beyond 3 yrs
Upto Rs.50000/-
1.75%below
SBAR
1.25%below
SBAR
Above Rs.50000/-
upto 2 lacs
1.25%below
SBAR
0.75%below
SBAR
Above Rs.2 lacs upto
Rs.5 lacs
1%below SBAR
0.50% below
SBAR
Above Rs.5 lacs and
upto Rs.10 lacs
SBAR 0.50% above
SBAR
8 Security:
- Primary
- Collateral
:
Hypothecation of assets financed by the Bank
NIL
9 Processing fees Waived
10 Repayment
5 to 10 years including the moratorium period not exceeding
1year
11 Documentation : As per simplified SME Documentation
12 Special features
: � The loan will be based on a simplified scoring model with
60% as the minimum score for qualifying for the loan
� A discount of 5 % is being offered by the Supplier
� An extended warranty period of 18 months is also made
available under this package
� Inspection can be at half yearly intervals
340
13 Methodology and
Operation of the
account
The Company will identify and furnish application to SBI. SBI shall
process the loan application and if found acceptable, the Bank
will sanction the loan within 15 days and convey the sanction to
the borrower and equipment supplier
Product highlights:
Our Bank is the largest financier for medical practitioners and in order to maintain and further
enhance our product profile to this segment of borrowers, the Bank has entered into a tie up
arrangement with M/s Confident Dental Equipment Ltd. for financing purchase of their products by
medical practitioners, nursing homes, clinics, diagnostic centres, etc. The Company will identify the
prospective buyers and refer them to the Bank who will consider the proposals on merits and if
found acceptable, will sanction the required term loan .the proceeds of the term loan, together with
the margin money component will be directly forwarded to the Company after the receipt of the
equipment by the borrower within 3 days.
Marketing tips:
� M/s Confident Dental Equipment Ltd. will identify the prospective buyer / borrower and
it is expected that we process the applications within 15 days
of receipt.
SCHOOL PLUS
25. Target Group
: � Primary and Higher secondary schools
� Graduation, Under-Graduation and Post Graduation
colleges
Professional colleges and coaching institutes are excluded from
this product and should be assessed on usual CRA model
341
26. Eligibility
: � Government Aided schools / colleges
� Private schools /colleges
� Schools/ colleges run by trusts of good standing
� Technical institutes recognized by AICTE / NBA /MCI
Institutions with a credit score of less than 4 are not eligible
27. Purpose
: � Purchase of land for building / play ground
� Construction of school building / auditorium
� Repair / renovation of existing building
� Purchase of computer and related equipment
� Purchase of books / manuals / software and other
training material
� Purchase of laboratory equipment
� Purchase of furniture / fixtures
� Purchase of sports equipment
� Equipment for mid day meal scheme
� Purchase of buses for student transportation
28. Type of facilities : Term Loan
29. Quantum of Finance : No cap.
30. Margin : 15% of the project cost
31. Rate of Interest
: Ranging from 0.75% below SBAR (9.50%) to 1% above SBAR
(11.25%) based on credit score
32. Security:
- Primary
- Collateral
: � Assets purchased out of Bank finance
� Personal guarantee of the Promoter / Trustees / any
other persons acceptable to the Bank and
� EM of land and building and other immovable assets of
the school or guarantor for 20% of the loan amount for
loans of Rs.2 lacs to Rs.10lacs and EM of other
immovable assets of the institute / guarantor for loans
above Rs.10lacs.for 20% of the loan amount
� For Loans given under Bank’s arrangement with Intel
and NIIT as service providers for schools.
- Hypothecation of charge over assets acquired
out of Bank finance
- Personal Guarantee of the key Manager /
Trustees / promoters / any other persons / body
acceptable to the bank.
342
- PDCs to cover complete bank exposure
33. Processing fees As applicable to C&I segment
34. Repayment
: Upto Rs. 2 lacs Maximum of 36 EMI
Rs.2 lacs to Rs. 5 lacs Maximum of 60 EMI
Rs.5 lacs and above Maximum of 84 EMI
Repayment to be fixed as per schedule of receipt of fees.
DSCR not to exceed 2
35. Documentation : � TL document for SME units
� Resolution of the trust
� Bye laws of the trust authorizing the trust to borrow
from bank
� Guarantee Agreement of the Chief promoter(s) /
Trustees/ Any other acceptable persons
36. Special features
: � Fixed rate Term Loan only
� An exclusive scoring model has been devised to assess
the credit risk and fix interest rates accordingly
� Disbursal will be made in stages for construction
� Direct payment to supplier for purchase of assets
� No reimbursement is permissible
� More than one loan can be granted subject to repayment
capacity as stipulated
The scoring model and the application form are enclosed in the
annexure section
Product Highlights:
Educational institutions are required to incur heavy capital expenditure for providing quality
education to the students in comfortable and safe surroundings. As a measure to provide timely
credit to such institutions subject to the repaying capacity through adequate income being available,
this product has been designed by the Bank for delivery through Scale III and above incumbency
branches.. The repayment schedule is also made flexible to avoid straining the liquidity of the
institution.
343
Marketing Tips:
� Schools which have a large student population but housed in inadequate or
unsafe buildings of poor quality can be approached for availing this product.
� End of the school year is an appropriate time to market this product as the
schools tend to take up renovation / expansion works during vacation time.
� Create data base of all schools and colleges in the locality/centre.
� Display product features in various vantage points in the vicinity of
schools/colleges.
� Marketing of this product should be taken up as a bouquet of related
products and services such as Teacher Plus, salary accounts, other personal
segment products such as car loans ,two wheeler loans, housing loans, etc.,
and services such as collection of fees, investment advisory services, etc.
FAQs
� Can this product be extended to franchisees of computer training institutes?
No but such institutes can be considered under the regular CRA model or under the
Mortgage Loan
344
State Bank of India
______________________ branch
Application cum interview form for financing Schools
Name of the School / Institute
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Address of reg. Office
In case of Corporate
Premises Owned / Rented
Address of the Unit
Phone No.
Fax No.
Email / website
Premises Owned / Rented
Other services being provided
Year of commencement of business
Experience in the line of activity
Constitution
Details of reconstitution in the past three years
Details of Proprietor / Partners / Directors
Name &
Qualification
Age PAN Residential
Address
Ph No / Mobile Net Worth *
345
* Opinion report on the bank’s prescribed format should be prepared.
Details of existing banking arrangements :
Name of the Bank /
branch
Facility Limit Outstanding Banking since
Details of Associate / Sister / Identical Firms :
Name of the unit Name(s) of
pro/partners
Banking with Limit Outstandings
Details of registration under Shops & Establishment Act / Sales
tax Act / Any other Act.
Position regarding Statutory assessment under IT / Sales tax /
Any other Year upto which assessment completed.
Credit facilities required
346
Fund based Limit required Non fund based Limit required
Cash Credit (incl. of Bill /
Chq purchases)
Letters of Credit if any,
Term Loan Bank guarantees, if any
Total Total
For term loans – Details of assets to be acquired (pl. enclose detailed list if necessary)
Description Details of the supplier Cost Time schedule for
completion
Need for the proposed expenditure
Cost Amount Means Amount
Land & Building Own funds
Equipment (proforma
invoice to be enclosed)
Other loans
(specify source)
Other assets Bank loan
Total Total
Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc…)
Business Information
Marketing arrangements
Level of competition
Major competitors
Competitive advantage of the unit
Fees details
Fee charges per month
No. of Students
Other income
347
Average Receivables
Level
Performance Parameters Post / projects
Past three years Projections
31.3 31.3 31.3 31.3 31.3
Sales / income
Net Profit
Depreciation
Cash Accrual
Tangible Net
Worth
TOL / TNW
DSCR
For term loans, please enclose projected profitability statements covering the period of repayment
Details of Security offered
Primary
Collateral
(i) Immovable property
Description of property Name of the Owner Value of the property Basis of Valuation
(ii) Liquid securities
Description Name of the owner Face Value When Acquired Present value
348
Details of Guarantor Where applicable
Name of the
Guarantor &
address
Age Qualification Net worth Banking with
I/We declare that the information given in the application form are true, correct and complete and
that they shall form the basis of any kind of facility State Bank of India may decide to extend to me /
us. I / we shall furnish all other information that may be required by bank in connection with my
application. The information may also be exchanged by you with any agency you may deem fit. You
may take appropriate safe guards / action for recovery of bank dues including publication of
defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing
arrangements for the unit with any bank except those indicated in the application. I / We confirm
that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there
are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency
proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to
abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended
to me / us.
Signature of Borrower
Date : Name of the Interviewing Official
Place :
List of documents to be attached
1. Partnership deed in original (to be returned) and a copy thereof
2. Memorandum and Articles of Association with certificate of Incorporation in original (to
b returned) and copies thereof.
3. Copies of relevant license, documents pertaining to ownership / tenancy / lease
agreement in respect of premises where activity will be carried out/ service or trade
related agreements etc.,
4. Latest copy of income – tax return / sales tax Assessment order etc.
5. Statement of account from the existing banker for last 6 months.
6. Copy of the Title deeds relating to collateral security being offered.
7. Photocopies of PAN card of partners / Directors wherever available.
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8. Copies of balance sheets for the past three years (audited wherever applicable)
9. Statements of personal assets and liabilities of Proprietor / Partners / Directors /
Guarantors.
10. Photographs of Proprietor / partners / Directors / Guarantors.
APPRAISAL FOR FINANCING UNDER SCHOOL PLUS
For already existing schools :
1 2 3 4 5
Parameters Factors Weightage Code
(A, B, C)
Score 3*
4
Past record of the students
(20%)
Average % of passing children (all
classes)
20%
Faculty (20%) Quality of teachers 10%
Teachers – students ratio 10%
Experience of promoters /
trusts (20%)
No. of years in the industry 20%
Security Value (20%) Primary + Collateral security 20%
Existing facilities (10%) Science / Computer lab. Library,
Arts & Crafts, Playground etc.
10%
Brand name (10%) Reputation on the School / Chain 10%
Criteria for scores to be given to the factors :
Average % of passing children (all classes)
• 90% and above – A
• 70% - 90% - B
• Less than 70% - C
Quality of teachers
• Post Graduate teachers i.e. M.Ed., M.Phil, Doctorate etc - A
• B.Ed teachers --------------------------------------- - B
• Untrained teachers ---------------------------------------------- - C
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Faculty / Student ratio
• More than 30% - A
• 2 – 3% - B
• Less than 2% - C
Experience of promoter / trusts
• More than 5 years - A
• Less than 5 years - B
• No experience - C
Security value (Primary + Collateral)
• More than 200% of Bank’s exposure - A
• More than 150% of Bank’s exposure - B
• More than 125% of Bank’s exposure - C
Existing facilities like Science or Computer Laboratories, Libraries, Facilities for teaching crafts, arts,
music, dance etc and playgrounds.
• Three of more of the above facilities - A
• Two facilities -------------------------- - B
• One or no such facility --------------- - C
• Reputed Chain of Schools / Very reputed name (Single School) - A
• Medium reputed school - B
• Unknown Brand or first school - C
o Assign any one of the three codes (A, B & C) to all the considerations as above.
o The marks assigned to these codes are A = 10, B = 6 & C = 2
o Calculate the total score of the risk matrix by multiplying weightage of each
consideration with the marks of these codes (e.g. if a proposal gets B in “past record
of the students” then, 20%* 6 = 1.2 mark would be given to the first consideration
and accordingly the sum of all consideration will be calculated for the proposal).
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Maximum score that can be achieved by a proposal is 10 and minimum score is 2. Interest rates to
be changed based on the scores are as under :
Score received by the proposal Collateral security to be considered
8 or more than 8 0.75% below SBAR, presently 9.50%
6 or more but less than 8% At SBAR, presently 10.25%
4 or more but less than 6 1% above SBAR, presently 11.25%
Less than 4 Term Loan not to be considered
For New Schools :
1 2 3 4 5
Parameters Factors Weightage Code
(A, B, C)
Score 3*
4
Experience promoters /
trusts (20%)
No. of years in the industry 20%
Faculty (10%) Quality of teachers 10%
Brand name (10%) Reputed Chain 10%
Expected Demand (20%) Density of school, composition of
middle, upper middle or higher
income families in the area
20%
Facilities (10%) Science / Computer lab, Library,
Arts & Crafts, Play ground etc.
10%
Security Value (30%) Primary + Collateral security 30%
Criteria for scores to be given to the factors :
Quality of teachers
• Post Graduate teachers - A
• B.Ed teachers - B
• Untrained teachers - C
Experience of promoter / trust
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• More than 5 years - A
• Less than 5 years - B
• No experience - C
Security value (Primary + Collatral)
• More than 200% of Bank’s exposure - A
• More than 150% of Bank’s exposure - B
• More than 125% of Bank’s exposure - C
Brand Name
• Reputed Chain of Schools / Very reputed name (Single School) - A
• Medium reputed School ------------------------------------------------- - B
• Unknown Brand of first school -------------------------------- - C
Expected Demand
• Demand certain ------------------------- - A
• Demand likely to be high ------------------- - B
• High competition, demand highly uncertain - C
Facilities
• Three of more of the above facilities - A
• Two facilities ----------------------------- - B
• One or no such facility ------------------------- - C
o Assign any one of the three codes (A, B & C) to all the considerations as above.
o The marks assigned to these codes are A = 10, B = 6 & C = 2
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o Calculated the total score of the risk matrix by multiplying weightage of each
consideration with the marks of these codes.
Maximum score that can be achieved by a proposal is 10 and minimum score is 2. Interest rates to
be changed based on the scores are as under :
Score received by the proposal Collateral security to be considered
8 or more than 8 0.75% below SBAR, presently 9.50%
6 or more but less than 8% At SBAR, presently 10.25%
4 or more but less than 6 1% above SBAR, presently 11.25%
Less than 4 Term Loan not to be considered
SEMFEX II
1. Target Group
: .Ex-servicemen, widows of servicemen. disable servicemen
Eligibility
: Individual or association of not more than 6 members.
Purpose
: To purchase utility vehicles, LCVs, Commander 650,
Major(CL-500) and Savari Rang and pick ups such as single cabs
and double cabs manufactured by Mahindra & Mahindra
.
Type of facilities : Term Loan
Quantum of Finance
: As per assessment. Not more than 10 vehicles should be owned
by the borrower including the vehicles to be financed. Gross
DSCR should be Minimum 1.75%
Margin : 20%
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Rate of Interest
: For loans below Rs.50000/-
1.75% below SBAR for TLs repayable within 3 years
1.25% for TLs repayable in 3years to 7 years.
For loans over Rs.50000/-
0.75% below SBAR for TLs repayable within 3 years
0.25% for TLs repayable in 3years and over.
Security:
- Primary
- Collateral
:
Hypothecation charge to be registered with RTA.
Mortgage of immovable / movable property to cover 50%of the
loan amount and / or third party guarantee
Processing fees Waived
Repayment
Within 3 to 7 years with a moratorium of 6 months. Longer
repayment period may be fixed based on the gross DSCR in
each case.
Documentation
: As per simplified SME Documentation
Special features
: Subvention amount is available per vehicle for 1 year
Methodology and
Operation of the
account
M&M dealers will obtain applications and after due diligence
will forward them to the Bank for appraisal and sanction if found
acceptable in all respects.
Product highlights:
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This scheme is for extending a soft loan to ex-servicemen to help them to augment their income in
post-retirement period by undertaking a suitable economic activity. Finance can be extended for
purchase of upto 10 transport vehicles of any make in utility and LCV range and cabs.. This loan can
be covered under tie up arrangements of the Bank with M&M, in which case, the borrower will get
the benefit of the subvention amount and two additional free service coupons.
Marketing tips:
� Processing fees has been waived,
� the repayment is extendable upto 7years.
� Collateral can be only upto 50% of the loan amount.
FAQs
� Is there any DSCR stipulation for this product?
The minimum gross DSCR should be 1.75
� Should Nabard refinance be obtained?
Only for the margin money assistance portion and not for the term loan.
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CORPORATE LOAN
1. Target Group
: Existing C&I and SSI customers and also non customers subject
to take over norms.
2 Eligibility
: .Existing corporate and non-corporate customers in C&I and SSI
segments with SB7 or SBTL7 rating. Non–customers can also be
offered this product after ensuring the creditworthiness and
obtention of opinion report from their bankers.
3 Purpose
: Repayment of high cost debt, VRS scheme, acquisition of
trademarks, patents, shoring up of net working capital, etc..
Where the loan is for shoring up of NWC, then the loan amount
should come down commensurate with the building up of the
NWC.
It should be ensured that the loan amount is not diverted for
purchase of land or shares for speculative purposes.
4 Type of facilities : Clean Term Loan
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5 Quantum of Finance
: Minimum Rs.25lacs
Maximum Rs.10 crores for non corporate(C&I – Mfg.) / SSI
borrowers
No cap for corporate borrowers
6 Margin
: Not applicable
7 Rate of Interest
: At least one step higher than the applicable rate as per the CRA
rating
8 Security:
- Primary
- Collateral
:
First charge on assets created from bank finance or extension of
first charge on current assets as the case may be.
1. First charge on fixed assets on pari passu basis with
other term lenders In case this is not possible for valid
reasons, second charge on fixed assets should be
obtained.
2. Personal Guarantee of promoters/partners/ proprietor
should be obtained. In the case of Corporates, pledge of
promoters' equity should be explored.
9 Processing fees As applicable to SSI / C&I units
10 Repayment
Repayment period not to exceed 3 years at quarterly/half yearly
intervals. Uneven or bullet instalments may also be permitted
based on the cash flows
11 Documentation : As per simplified SME Documentation
12 Special features
: � The discretionary powers are those applicable to
term loans.
� A second Corporate loan may also be considered while
the first loan is outstanding subject to all the earlier loans and
WC advances being regular and the conduct of the accounts
has been regular.
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Product Highlights:
Corporate loans have been in vogue for sometime for corporate entities. It is a clean term loan
which can be used for any specified purpose connected with the unit such as shoring up of net
working capital, VRS scheme for its employees, advertisement campaign, replacing high cost debt
with low cost funds and so on. The loan can be extended for a minimum amount of Rs.25 lacs to
Rs.10crores for non –corporates and for any amount for a corporate.
Marketing tips:
� This is a useful product to attract the borrowal units of other banks to our books subject
to fulfillment of takeover norms.
� Units which are facing liquidity crunch can be offered this loan to shore up their working
capital funds.
� Units which are contemplating VRS scheme to reduce their wage bill are a good source
for this product.
� Units which are about to launch a new product and require to spend on advertisement
and promotion can avail this facility.
FAQs
� Can improved pricing be offered to units below the applicable rate for attracting good
business connections?
Based on merits on a case to case basis, finer pricing can be offered after obtaining
approval from the appropriate authority.
� Who is the appropriate authority?
If the pricing is to be the same as that applicable as per CRA rating, the sanctioning
authority has the discretion to approve the same. For any further improvement in
pricing, the authority will depend upon the quantum of reduction sought in the rate of
interest to be charged.
RENT PLUS
1. Target Group : Owners of large commercial / office spaces rented out to large
corporates, MNCs, banks, PSUs, our Bank, etc. in Metro/urban
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areas.
2 Eligibility
: Individuals /partnership firms/ corporates
3 Purpose
: To meet liquidity mismatches
4 Type of facilities
: Term Loan
5 Quantum of Finance
: Minimum Rs.50,000/-
Maximum
Metro & urban Centres - Rs.10 crs.
Subject to 60% of the gross rental income for the residual lease
period less (advance rent received+ property tax + income tax +
other statutory dues of the lessor) or 85% of the market value of
the property whichever is less
6 Margin
: 40% (CGMs of Circles have discretion to reduce the margin to
30%
7 Rate of Interest
: For loans upto 3 years - 0.25% above SBAR
Above 3 years upto 7 years - 0.50% above SBAR
for the full period
Above 7 years upto 10 years - 0.75% above SBAR
For the full period
Finer pricing as per CPPD guidelines for competitive pricing
RENT PLUS LOAN:
CONCESSIONAL
PRICING FOR SELECT
TARGET GROUP
Target group: Landlords of SBI, our Subsidiaries & Associates and
Public Sector Banks and Private sector Banks viz. HDFC Bank,
Axis Bank ICICI Bank. Top MNCs can be brought under the ambit
of the proposed pricing with the prior dministrative approval of
the Group Head.
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SCHEME CODE 5032
(SME/aks/ Cir/52
October 4, 2010)
Interest rate: 2.50% above the Base rate – effective rate being
10% on date.
The concessional pricing would be valid for all sanctions up to
31.03.2011.
All other terms and conditions of the Rent Plus scheme would
be applicable mutatis mutandis
8 Security:
- Primary
- Collateral
:
Assignment of receivables and recording of power of attorney
with the lessee is mandatory
� First charge on property rented out or any other
property of a value not less than 120% of the loan
amount
� Personal guarantee of partners / directors
In the case of public limited companies if the collateral of 120%
is available, the personal guarantees of directors may be waived
by the sanctioning authority
� In case the loan amount does not exceed Rs.25000/- and
the Bank is the lessee, then EM may be waived subject
to the lease deed does not expire during the currency of
the loan
Waiver of EM may be allowed by a sanctioning authority not less
than CCC –I in select deserving cases
• Where lessee is a reputed corporate (eg. Bank,MNC),
and maintaining consistency in profitability for at least
3 years and is agreeable to execute the Tripartite
Agreement AND
• Where lessor’s creditworthiness and integrity are
beyond doubt and personal guarantees of all
owners/partners are available.
9 Processing fees 1% of loan amount to be paid upfront presently as per CPPD
circular No. CPP/JLJ/CIR/39 dated 14.08.2007
10 Repayment
In equated instalments at the same frequency at which rent is
received in a maximum period of 7 years or the residual lease
period whichever is less.
11 Documentation
: � Application for loan
� Arrangement letter
� Agreement of loan and power of attorney
� Tripartite Agreement between the lessor, the lessee and
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the Bank OR
� An irrevocable power of attorney from the lessor to
collect the rent which should be duly registered with the
lessee.
� Deed of Guarantee if applicable
12 Special features
: � The classification of segment is based on the purpose for
which the loan is being availed.
Product Highlights:
This product provides finance against assignment of future rentals. The scheme is available at metro & urban centres only and is aimed at owners of residential or commercial projects which have been lease out to large or medium corporates, and Banks / MNCs. The credit is extended by way of a term loan and is repayable within the residual period of lease not exceeding 7 years
Marketing tips:
� This product can be offered to all the owners of our Bank's rented premises
both for branches as well as residential purposes. � The product can also be offered to owners of other banks' branch premises
as the terms and conditions of our product are much more attractive than those of other banks for a similar product.
FAQs
� Can we accept some other property as collateral than that which has been rented out and
the rent receivables of which are being offered as primary security?
Yes. Any property whose value is estimated to be at least 120% of the loan
amount OR personal guarantee from an acceptable person(s) can be accepted as
collateral .
� Can we extend this facility if the lessee is not an MNC/Bank/corporate?
We can give this loan in such cases on merits, subject to obtention of administrative
clearance from GM (Network).
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WORKING CAPITAL FINANCE TO PRIVATE BUILDERS OF RESIDENTIAL FLATS
1. Target Group
: Reputed builders with an excellent track record of timely and
quality construction of projects undertaken and of sound
financial strength.
2 Eligibility
: Should have completed a few projects
Should have a minimum net –owned funds
The project should have all statutory clearances
The project should be completed in 18 to 24 months
3 Purpose : To meet working capital requirements
4 Type of facilities : Cash Credit
5 Quantum of Finance
: The assessment will be based on the projected cash flow of the
project subject to a maximum of 50% of the project cost or Rs.5
crores or 5 times his net worth, whichever is less. The
reasonableness of the project cost has to be ascertained from
specialised agencies.
6 Margin
: At least 50 % of the project cost
7 Rate of Interest
: As applicable to C&I advances based on CRA rating
8 Security:
- Primary
- Collateral
: EM of the land. This can be waived in the case of reputed
builders of good status and financial strength subject to
obtention of personal guarantees of directors/ partners or
corporate guarantee of associate concerns acceptable to the
Bank.
Tangible collateral security to the extent feasible should be
obtained from the borrower / guarantor.
363
9 Processing fees As applicable to C&I advances
10 Repayment
Within a maximum period of 36 months. If repayment period
including moratorium exceeds 36 months, finance will be
provided by way of Term Loan.
11 Documentation
: As per simplified SME Documentation
12 Special features
: � All precautions relating to appraisal , sanction and
documentation should be meticulously followed as this is a
high risk product.
� It should be ensured that the credit worthiness and
integrity of the major builders are reviewed and approval
obtained for all their projects and also for specific projects
for construction of flats.
� No administrative clearance is required in the case of limits
granted by CCC-II and above. In all other cases, AC has to
obtained from CCC-II.
Refer circular CPP/RSN/CIR/10 dt. May 6, 2006.
Product highlights:
Construction activity has been witnessing exponential growth in recent years generating vast
employment opportunities. The Bank has also to tap this opportunity for business by way of credit
facilities, both fund based and non fund based. Construction activity is financed by way of cash credit
for which the assessment is based on cash budget subject to a limit of Rs.5crores or 5 times the
networth of the applicant or 50% of the project cost whichever is less.
Marketing tips:
� Projects taken up by reputed companies should be got assessed in advance by specialist
agencies and kept on record. As and when the application for finance is received it would be possible
to consider the proposal in a short time. Otherwise, either it will take a long to time to examine all
the aspects thoroughly or if the proposal is cleared in a hurry, chances are critical aspects will be
overlooked in this high risk product.
� We can give housing loans for flats in a building for which we have already extended credit facilities to the builder. It would be easier to process proposals
364
since the due diligence regarding the project would have already been
completed. The proceeds of the housing loans will be used for extinguishing the
loan to the builder.
Circular Reference
Sl.No. Subject Circular No.
1. Financing of private Builders for Residential
complexes and for commercial Real Estates.
CPP/RSN/CIR/10 dt. 6/05/06
2. Lending to Real Estate Sector CPP/RSN/CIR/57 dt. 10/10/06
3. Lending to commercial Real Estate CPP/RSN/CIR/25 dt. 20/06/07
4. Guidelines on clarification of expense on
commercial Real Estate (CRE)
CPP/DMR/CIR/58 dt. 8/10/09
5. “ “ CPP/DMR/CIR/53 dt. 22/9/09
LOANS FROM FCNR(B) FUNDS
1. Salient features of the scheme are as follows:
a) Loans can be granted for manufacturing as well as trading activities of units rated
SB 10 and above. Exporters and Industries/Hotels with matching forex inflows will
be preferred.
b) Loans can be granted for working capital as well as Term Loan requirements by
way of FCNR(B) DLs and FCNR(B) TLs. FCNR(B) Demand loans can be
sanctioned for a maximum period of 12 months. FCNR(B) Term Loans can be
sanctioned for a duration of 1 to 5 years. Whenever Term loans are considered for
a period of above 3 years a specific prior clearance needs to be obtained from FD.
Sanctioned for a period of above 3 years, Bank will retain the option to convert the
loan in to Rupee loan at any time after 3 years from the date of sanction. Fresh
loans above 12 months (FCNRB-TL) to be discouraged. All existing loans will
continue to be repriced will revised spreads at the end of 2 years after the
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disbursement of loans, as per the instructions contained in circular no.
CCO/CPPD/TL/102/2008-09. Term loans would continue to be rolled over at the
end of 12 months to the extent possible for the residual tenor of the loan, with the
prevailing pricing and margin, at the time of roll-over.
c) Loans will be granted in US Dollars , Pound Sterling, Euro and Yen if funds are
available
Minimum: US Dollars 50000 or equivalent in other currencies and in multiples of
USD/GBP/EUR 10,000 and JPY 1,000,000 thereafter.
Maximum: US Dollars 5 million per borrower in general for working capital
and term loan put together. After that approval of Dy MD (IBG) will be required.
d) Prior funds clearance should be obtained from FD before commitment to
borrowers. In no case sanction of FCNR(B) loans should be communicated to the
borrower before funds allocation clearance is obtained from FD Kolkata.
e) Rate of interest: Base rate is 6 mth LIBOR/Euribor for loans upto 6 months and
matching period LIBOR/Euribor for loans beyond 6 months. The interest rate would
be re-fixed every 6 months from date of first disbursement based on prevailing
LIBOR on material dates. The policy for reset of interest rates applicable to other
TLs will be applicable mutatis mutandis to FCNB TLs also. The base rate and the
spread over it range according to the credit rating of the unit.
FCNR (B) – DL (For period up to 12 Months)
Credit Rating (New CRA model) PRICING
SB 1(SB-1,SB-2) Libor + 4.25%
SB2(SB-3 to SB-5) Libor + 5.00%
SB-3(SB-6,SB-7) Libor + 5.50%
SB-4(SB-8,SB-9) Libor + 6.50%
SB-5(SB-10) Libor + 7.00%
THERE SHALL BE NO SEPARATE PRICING FOR EXPORTERS IN LIEU OF PRE-
SHIPMENT / POST-SHIPMENT FINANCE. LIBOR SHALL BE 6 MONTH LIBOR FOR
LOANS FOR & UPTO 6 MONTHS AND MATCHING PERIOD LIBOR FOR LOANS OF
MORE THAN 6 MONTHS DURATION.
FCNR (B) – TL
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PERIOD OF
LOAN
Credit Rating (new CRA model) Pricing
Upto
12 Months
SB1(SB-1,SB-2) Libor+ 4.50%
SB2(SB-3 to SB-5) Libor + 5.25%
SB-3(SB-6,SB-7) Libor + 5.75%
SB-4(SB-8,SB-9) Libor + 6.50%
SB-5(SB-10) Libor + 7.25%
Above
12 Months
FRESH LOAN IN THIS TIME BUCKET TO BE DISCOURAGED.
EXISTING LONG TERM LOANS WILL BE CONSIDERED UNDER THE
TWELVE MONTHS’ BUCKET
f) Withholding Tax-nil
g) Processing Fee- for FCNR(B) DLs -there is no separate processing fee if it is
already recovered at the time of fixing the overall limit. For FCNR(B) TLs
processing fee applicable to the equivalent to the Rupee term loan should be
recovered.
h) Transaction Cost-Upfront
Rs.25,000/- for each FCNR(B) DL
Rs.35,000/- for each FCNR(B) TL to be credited to Branch Commission A/C.
i) Commitment Charge- ( for both DLs and TLs)
For disbursement,time allowed without committment charge is 15 days from the
date of allocation of funds.
In case disbursement is not availed within 15 days from the date of Funds Angle
clearance (FAC) the same will be automatically cancelled. The request of FAC for
the same customer under the said facility, can be made only after 45 days of the
original FAC issuance date. However, customer can make a request for fresh FAC
before 45 days of FAC issuance date provided he pays a charge of 1% p.a. from
the date of issuance of lapsed FAC.
j) Transfer Price Mechanism: 80% of the interest recovered will have to be given as
Central Office interest irrespective of business segment.
k) Branches to revalue the balances half-yearly at rates advised by FD.
l) Penalty for early payment (Minimum lock-in period of 3 months)
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For early repayment of the loan, a penalty at 1.5% per annum on the amount of the
loan prepaid,for the unexpired period of the loan is charged.
m) For repayment of FCNR(B) loans, Authorised Dealers can sell foreign currency to
borrowers without RBI permission. These loans can also be repaid by adjustment
of advances/inward remittances/export proceeds/balances in EEFC accounts/other
forex inflows. In the event of no funds being available in the borrower’s
account, an overdraft/irregularity is to be created for remitting the FCNRB
(DL) / instalments of FCNRB(TL) on due date to FD. Kolkata.
n) The scheme is operated at designated branches(DBs). Other branches can
operate the scheme through DBs.
o) If customers wish to book forward sale contracts for their interest liability they may
be permitted to do so by giving these contracts separate treatment and these contracts
once booked will not be allowed to be cancelled before delivery date.
p) A sensitivity analysis is to be carried out considering the possibility of a fluctuation
in rupees to an extent of 10% if hedging is waived.
q) FCNRB Loans (DL & TL) should not be used to PCFC loans.
2. FCNR(B) DEMAND LOANS
a) Period: Up to a period of twelve months.
b) Within the Rupee MPBF fixed for the borrower and the Fund Based Working Capital
sanctioned by the Bank.
c) It can be part of either working capital demand loan or cash credit component. If
Rupee WCDL has been converted to FCNR(B) DL then maturity of the FCNR(B) DL
will be same as that of Rupee WCDL. Availment of FCNR(B) DL for broken period is
also permitted
d) Disbursed in one lump sum, so also the repayment.
e) Loans can be granted on fully hedged basis. Waiver for booking of Forward cover can
be approved by the Credit sanctioning authority not below the rank of CCC-1, if the
corporate has natural hedge or well laid out corporate hedging policy. However,
wherever waiver is permitted, Bank reserves the right to insist on hedging any time
during the currency of the loan based on period reviews undertaken or whenever
major adverse movement in exchange rates take place.
f) FCNR(B) DL can be utilised to prepay the WCDL, with the approval of the controlling
authority.
368
g) The number of WCDL and FCNR(B) DLs put together should not exceed seven per
borrower.
h) For exporters, FCNR(B) DL in lieu of EPC (carved out of EPC limits) can be
sanctioned. Such credits to exporters would amount to export credit.
Adjustment of advance/inward remittances/export proceeds, balances in EEFC/EFCA
a/cs etc. can be made in FCNR(B) DL.
i) Revaluation of outstandings should be made at the beginning of each month to assess
whether the Rupee liability is within the capacity of the borrower. If not FCNR(B) DLs
should be converted into WCDL under advice to controllers.
j) Interest should be recovered for FCNR(B) DLs at monthly intervals at the ruling TT
Selling rate for the Foreign Currency amount.If the interest amount is Rs.10 lakhs and
above finer rates can be applied.
k) FCNRB (DL) in excess of 50% of fund based working capital limit may be freely allowed
if done on fully hedged basis. In other cases, permission to be obtained from CGM.
SME Construction Equipment Loan (SCEL)
1. Target Group
: Contractors, Firms, firms engaged in construction activity
Product Code 6241-1073
2 Eligibility
: Firms/ Companies (including Contractors) engaged in
construction activity with a minimum rating of SB-8 (new)
3 Purpose
: Line of Credit for financing New Machinery/ Equipments/
Vehicles for construction activities. Borrowers engaged in
mining activities can also be financed under the scheme.
As a corollary, the borrowers engaged in mining activities
can now be financed under our other company specific
369
construction equipment loan schemes viz. Tie up with
JCB, Telecon, Volvo, Escorts etc
4 Type of facilities : Term Loan
5 Quantum of Finance
: Minimum Rs 25.00 lac
Maximum Rs 25.00 Cr.
(In Delhi, Kolkata, Chennai, Mumbai, Hyderabad and
Bangalore
maximum limit is Rs 50.00 Cr)
6 Margin
: 15% - 20% in case of SB1 SB2 borrowers.
20 – 25% for others
7 Rate of Interest
: For SB1 & SB2 borrowers: 1.50% below SBAR
For others : 1.25% below SBAR
No further concession would be considered.
8 Security:
- Primary
- Collateral
: 1.Hypothecation of machinery/ equipment / vehicles financed
by the Bank.
2. Registration Charge with RTA
3. Pre payment cheques for principal amount, favouring SBI a/c
CEL…….(Name of borrower)
Hypothecation of other unencumbered equipment or EM of
property to the extent of at least 25% of the loan amount
9 Processing fees For SB1, 2 borrowers – Rs.200 per Rs.1 lac loan amount
For other borrowers – Rs.300 per Rs.1 lac loan amount
Sanctioning authority has discretion to reduce upto 50%
Documentation Charges:
For SB1 SB2 borrowers – Rs.5000/-
For others - Rs.10000/-
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10 Tenure 2 to 3 years from first disbursement (including moratorium
period of maximum 3 months). Tenure can be extended upto
4 years on merits of the case
11 Repayment
In EMIs
Variable repayment program based on cash flow of the
company can also be considered if the borrower so desires.
12 Documentation : As per simplified SME Documentation
13
Disbursement
The loan may be disbursed in several tranches within a
period of maximum one year from the date of Sanction
depending on requirement of the borrower for purchase of
equipments/ machinery/ vehicles within one year. One
tranche should not be less than 10% of the amount of
loan. Payment to be made direct to suppliers.
14 Processing
Charges/ upfront fee
50% concession in the prescribed charges
15 Documentation
Charges
50% of the prescribed charges
16. Pre Payment Charges 2% of the amount prepaid
17.
Penal interest
For SB 1 to SB-5 borrowers: @ 1.00% per month for the
default amount. For other borrowers: @ 2.00% per month
for the default amount On business considerations
sanctioning authority may approve concession upto 50%
18.
Inspection
Half Yearly. Sanctioning Authority may waive it in suitable
cases based on the customer credentials as also when the
equipment is spread over various construction sites.
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19.
Insurance
Comprehensive insurance policy with endorsement in favour of
SBI as “loss payee”
20. Review Annually
21 Applicability The scheme will be available to all branches for financing
SIB/C&I customers which are not being catered to by MCG/
CAG
Sl. No. : 697/2009 - 10
Circular No. : NBG/SMEBU-CONSTEQUIP/62/2009-10
Saturday, January 16,2010.
CONSTRUCTION EQUIPMENT LOAN – JCB MACHINES
1 Eligibility Those engaged in construction activity
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2.
Purpose
Purchase of equipment manufactured by JCB
3.
Quantum
Minimum Rs.15 lacs
Maximum : Rs.100 lacs
4.
Margin
25% for borrowers who are new to this line of business
15% in case of borrowers having 9 machines
5% in case of borrowers having more than 9 machines
5.
Repayment
Upto 4 years including a moratorium of upto 3 months
6.
Interest
For SB1 to SB5 (new rating); at SBAR
For SB6 to SB9 (new rating) : 0.50% above SBAR
For borrowers not subjected to CRA rating: 0.50% above SBAR
Those with CRA rating below SB9 should not be financed.
7.
Penal interest
2% for the amount and period in default
Note :-
• All other terms and charges as per card rates.
• This scheme is valid 31.03.2010
TIE UP WITH ZEE INTERACTIVE LEARNING SYSTEMS(ZILS)
FINANCING OF PRIMARY AND SECONDARY SCHOOLS
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14. Name of the scheme : KIDZEE
15. Type of Loan : Term Loan
3. Eligibility : Have signed franchisee agreement with ZILS which is the
Education Division of ETC Networks Limited.
4. Purpose : Term Loan for Initial Investment for
- Payment of Franchisee fees
- Purchase of education and office equipment
- Interior Decoration
- Construction of Building
Term Loan to pay Operating Costs for first six months after
commencement of school to be disbursed every month for
- Personnel Cost
- Administrative Cost
- Marketing Cost
5. Quantum of Finance : For initial investment –
� Rented Premises: upto 75% of the investment
(excluding land) up to maximum of Rs 1 crore
� Owned Premises where construction is required: upto
75% of the investment up to maximum of Rs 5 crore
For operating costs for first six months – upto 75% of
Operating cost up to maximum of Rs 5 Lacs per month.
6 Security : Primary – Hypothecation of assets created by the loan
Collateral – Tangible Security at 100% of exposure of SBI to
franchisee, in the form of property, deposits, shares etc. May be
relaxed to 50% by DGM (O&C).
7 Margin : 25% of initial investment and projected operating costs for first
six months
8 Repayments : Repayments in maximum 48 monthly installments.
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Moratorium period of maximum 12 months from
Commencement of classes as required. Classes to commence
maximum within 1 year after franchisee
Agreement.
9 Rate of Interest : Where the collateral is 100% of loan value: 0.50% above SBAR
(reduced by 50 bps)
Where the collateral is 50% of loan value: 1.25% above SBAR
(reduced by 25 bps)
10 Other Features Quantum of Initial Investment and Operating Cost will be
advised to Bank by ZILS as per standard ZEE Business plan,
based on which financing will be done. Financing to be done
against 100% tangible collateral security.
Sl. No. : 376/2009 - 10
Circular No. : NBG/SMEBU-KIDZEETIE/35/2009 - 10
Construction Equipment Loan (CEL) –JCB India
Name of the Product Construction Equipment Loan (CEL) –JCB
India
Nature/ Purpose Term loan for purchase of construction equipments viz. loaders, excavators, cranes etc manufactured by JCB
Eligibility Individuals/ Firms/ Companies engaged in construction work
Amount Minimum Rs 15 lac Maximum Rs 100 lac
Tenure Up to 4 years (including moratorium of up to 3 months).
Margin 25% in case of borrowers who are new to this line i.e. buying their first loader/ machinery etc. 15% in case of buyers having up to 9 machines 5% in case of buyers already having more than 9 machines
Interest Advance under the scheme would also be subject to the Bank’s instructions regarding credit rating in general advances. The interest is linked to
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rating as under: (i) For SB 1 to SB 5 (new rating) borrowers: at par with SBAR (ii) For SB 6 to SB 9 (new rating) borrowers: 50 bps above SBAR (iii) For borrowers which are not subject to rating (presently advances below Rs 25.00 lac) : 50 bps above SBAR Advance is not to be sanctioned where rating is below SB 9
Primary Security (i) Hypothecation of the Equipment (s) financed from the Bank Loan. In case of Vehicles, registration of charge with RTO is to be ensured. (ii) Standing instructions to debit the borrowers SB/CD account with the loan installments in case of account being with us. In case of account being with other bank post-dated Cheques for 24 monthly installments. However, in both the cases at least 3 undated Cheques should be obtained and held on record with loan documents till the account is closed. However, the borrower should be encouraged to deposit the installments in cash - right from the beginning.
Collateral securities
1. All eligible advances to be covered under the collateral free CGTMSE Scheme. However, fee will be recovered from the borrower. 2. In case an advance can not be covered under CGTMSE - hypothecation of other unencumbered equipments or mortgage of property to the extent of at least 25% of the loan amount is to be obtained.
Assessment As applicable to Term Loans
Disbursement Payment to be made direct to suppliers/ dealers.
Repayment In EMIs
Penal Interest 2% for the amount and period in default
Inspection Half yearly. However, in case of account giving warning signals, the frequency should be increased as may be warranted
Insurance Comprehensive Insurance policy with endorsement in favor of SBI on the policy as “loss
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payee” Comprehensive Insurance policy with endorsement in favor of SBI on the policy as “loss payee” All other terms and conditions regarding assessment, conduct and supervision etc would be applicable like in other advances
The scheme will remain valid upto 31.03.2011 NBG/SMEBUCONSTEQUIP/ 80/2009 – 10, March 04,2010.
Tie up with JCB India to finance construction equipments being manufactured by
them
(i) JCB Tie up (SBF) 6221-1075
(ii) JCB Tie up (C&I) 6241-1075
SUPPLY CHAIN FINANCE-ELECTRONIC DEALER FINANCING SCHEME (E-DFS) TIE-UP WITH IOCL FOR FINANCING THEIR DEL CREDERE AGENTS (DCAs) AND CONSIGNMENT STOCKISTS (CS) FOR THE POLYMER BUSINESS
PURPOSE IOCL is entering into polymer business through their newly commissioned Naptha Cracker plant at Panipat, Haryana. IOCL proposes to sell the polymer products to its large customers directly but for medium and small customers they propose to appoint Del Credere Agents (DCAs) and Consignment Stockists (CS).
The operational flow for DCA and CS is as follows
Del Credere Agent (DCA) Consignment Stockist (CS)
DCA will be appointed by IOCL for
large and medium size customers. DCA will be appointed by IOCL for
large and medium size customers.
Customers will be identified and registered with IOCL on online
platform. DCA will help in this process
Indent will be verified by DCA as
well as by local Regional Manager of IOCL.
Customer will raise the indent either through DCA or will himself
login at IOCL website and place the
CS will be appointed by IOCL for small size customers.
Customers will be identified and
registered with IOCL on online
platform. CS will help in this process.
CS will maintain warehouse on
behalf of IOCL. Goods in the
warehouse will be of IOCL.
Customer will raise indent on CS
and after verifying position of
goods, CS will inform field officer
of IOCL. Field officer will release the indent and invoice will be
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The details of the tie-up are as follows: Proposed terms and conditions for Financing IOCL’s Consignment Stockist
(CS)
Purpose To provide finance to the Consignment Stockist of IOCL for the sales made to their customers.
Facility Required Fund Based • Cash Credit Limits. Disbursement on invoice by invoice basis through electronic Dealer Finance Scheme platform (e-DFS). Non Fund Based • Bank Guarantee limits (BG’s will be issued in favour of IOCL.)
IOCL will raise invoice on the
customer and transport the goods directly to the customer
Within the credit period, allowed
by IOCL, the customer pays to
Company, failing which, IOCL
recovers money from DCA on the
next day of the expiry of credit
IOCL uses our Internet Banking
system to upload the details of invoices and raise a debit request on
DCA Account
IOCL gets money and DCA makes
repayment to our Bank as per the
terms of credit.
IOCL gets money and CS makes repayment to the Bank as per the terms of
credit extended to him by
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Amount of finance Minimum of Rs. 1 Cr (Fund based + Non – Fund Based) and maximum of Rs. 50.00 Cr.
Eligibility Criteria The facility shall be extended to the CS appointed and recommended by IOCL. Details will be made available at: SBI Times>Departments>SME BU>SCFU
Margin CC: NIL Bank Guarantee: 10% (Cash Margin)
Disbursement Disbursement of CC limits through newly developed e-DFS. • 100% financing to CS against invoices raised on the customers. • Debits in the CS account will be raised by IOCL directly.
Usance Maximum upto 45 days including grace period extended by IOCL to the CS.
Grace Period NIL
Limit assessment Limits to be assessed on the basis of projected monthly sales as provided by IOCL or CS. The limits will be equal to the projected monthly sales apportioned to the usance period.
Security Primary Hypothecation of receivables for which invoices have been raised on the customers. Collateral (For total FB + NFB): • Minimum 25% of tangible collateral standing in the name of CS. (In case the collateral is owned by a third party the guarantee of the owner has to be obtained.) • Personal Guarantee of all the directors/promoters of CS.
Comforts from IOCL 1) IOCL will identify and recommend the CS for Dealer financing along with the projected purchases. 2) IOCL will stop supplies through CS in the event of default by CS. 3) IOCL will help the Bank in recovering the overdue on the best possible efforts basis. 4) IOCL will transfer all the funds and dues to the CS to the Bank in the event of default.
Interest rate Interest rate will be linked with SBAR (Currently @ 11.75%) depending on the amount of tangible collateral offered by the CS Tangible Collateral
Interest Rates
25% 12.75% (SBAR +1.00%) 50% 12.25% (SBAR +0.50%) 75% & above
11.75% (SBAR).
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Penal Interest Penal rate of 3% will be applicable over and above the contracted rate for all overdue invoices till the date of payment.
Documentation With IOCL: • MOU/Agreement for accepting the various terms and conditions of the facility. • Letter of Recommendation mentioning the details of the CS. With CS:
• All the standard SME documents which are currently being taken by the branches for normal dealer finance tie-up. • A separate agreement mentioning the terms & conditions of the arrangement
Charges Loan processing charges, inspection charges and EM charges are to be levied 50% of the normal card rates. • Bank guarantee charges also to be levied 50% of the normal card rates.
Other Conditions CS has to provide four pre - signed cheques in the name of the concerned SBI Branch.
Repayment Repayment will be made though e-DFS platform and will be done invoice wise by CS.
Inspection Monthly.
Validity of sanction 1 year.
Terms and Conditions for Financing IOCL’s Del Credere Agents (DCA)
Purpose To provide finance to the Del Credere Agents of IOCL for the sales made to their customers.
Facility Required Fund Based • Cash Credit Limits. Disbursement on invoice by invoice basis through e-DFS platform. Non Fund Based • Bank Guarantee issued in favour of IOCL.
Amount of finance Minimum of Rs. 1 Cr (Fund based + Non – Fund Based) and maximum of Rs. 50.00 Cr.
Eligibility Criteria The facility shall be extended to the DCAs appointed and recommended by IOCL. Details will be made available at: SBI Times>Departments>SME BU>SCFU
Margin CC: NIL Bank Guarantee: 10%
Disbursement Disbursement of CC limits through newly developed e-DFS. • 100% financing to DCA against invoices raised on the customers. • Debits in the DCA account will be raised by IOCL
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directly. Usance Maximum upto 45 days including the grace period
offered by IOCL to the DCA. Grace Period Nil
Limit assessment Limits to be assessed on the basis of projected monthly sales as provided by IOCL or DCA. The limits will be equal to the projected monthly sales apportioned to the usance period.
Security Primary Hypothecation of receivables for which invoices have been raised on the customers. Collateral (For total FB + NFB): • Minimum 25% of tangible collateral standing in the name of DCA. (In case the collateral is owned by a third party the guarantee of the owner has to be obtained.) • Personal Guarantee of all the directors/promoters of DCA.
Comforts from IOCL 1) IOCL will identify and recommend the DCA for dealer financing along with projected purchases. 2) IOCL will stop supplies through the DCA in the event of default by the DCA. 3) IOCL will help the Bank in recovering the overdues on the best possible efforts basis. 4) IOCL will transfer all the funds and dues to the DCA to the Bank in the event of default by the DCA.
Interest rate Interest rate will be linked with SBAR (Currently @ 11.75%) depending on the amount of tangible collateral offered by the CS Tangible Collateral
Interest Rates
25% 12.75% (SBAR +1.00%)
50% 12.25% (SBAR +0.50%) 75% & above
11.75% (SBAR).
Penal Interest Penal rate of 3% will be applicable over and above the contractual rate for all overdue invoices till the date of payment
Documentation With IOCL:
• MOU/Agreement for accepting the various terms and conditions of the facility. • Letter of Recommendation mentioning the details of the dealers as well as their monthly purchases from IOCL for the last two years. With DCA: • All the standard SME documents which are currently being taken by the branches for normal dealer finance tie-up. • A separate agreement mentioning the terms &
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conditions of the arrangement Charges Loan processing charges, inspection charges and EM
charges are to be levied 50% of the normal card rates. • Bank guarantee charges also to be levied 50% of the normal card rates.
Other Conditions DCA has to provide four pre signed cheques in the name of concerned SBI Branch.
Repayment Repayment will be made though e-DFS platform and will be done invoice wise by DCA.
Inspection As per extant instructions.
Validity of sanction 1 year.
INVENTORY FUNDING TO DEALERS OF MARUTI UDYOG LIMITED SCHEME CODE: 9075
Purpose To provide assistance to dealers of Maruti Udyog under the tie up arrangement for financing of vehicles.
Nature of Facilities Cash Credit
Eligible amount of finance
Upto 100% of 60 days of working capital requirements for Stocks of vehicles.
Eligible customers Corporate/ Non-corporate/ Individuals having franchisee appointment letter from Maruti.
Repayment Repayable within 60 days of disbursed (batch-to-batch basis), renewal every year
Rate of Interest As per credit scoring matrix
For loan above Rs.25 lacs:
CRA Rating Rate of Interest (Base
Rate = 7.50%p.a.) SB1 to SB2 3.25% above Base Rate
(10.75% p.a.) SB3 to SB5 3.75% above Base Rate
(11.25% p.a.) SB6 & SB7 4.25% above Base Rate
(11.75% p.a.) SB8 to SB9 4.75% above Base Rate
(12.25% p.a.)
* No finance below SB9.
Security a) Primary: Hypothecation of stocks/ other assets of the
dealer.
b) Collateral Security: Personal guarantee of promoters
(mandatory)
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Primary security + tangible collateral security should be
125% of the loan amount Inspection Bi-monthly
Inspection Charges 50% concession on the following card rates:
Up to Rs.25000/- - Nil
Above Rs.25000/- but up to Rs.2 lacs - Rs.500/- p.a.
Above Rs.2 lacs but up to Rs.5 cr. - Rs.500/- per lac p.a. for
inspection within same municipal limits with a maximum of
Rs.12000/- p.a.
For outstation inspection actual charges + 25% subject to the minimum of Rs.12000/-p.a.
Above Rs.5 cr. - Actuals + 25%, subject to the minimum of
Rs.12000/- p.a.
Insurance The assets created out of Bank’s finance are to be insured for
full market value, against all risks
Processing Fees 50% concession on the following card rates.
Up to Rs.25000/- - Nil
Above Rs.25000/- but up to Rs.2 lacs - Rs.500/-
Above Rs.2 lacs but up to Rs.1 cr. - Rs.500/- per lac Above Rs.1 cr. - Rs.400/- per lac
Minimum Rs.50000/- Maximum Rs.20 lacs
COMMODITY BACKED WAREHOUSE RECEIPT FINANCING
Purpose To finance traders/ owners of goods/ manufacturers for own processing against warehouse receipts of warehouses managed by MCX/NBHC, NCDEX(NSMSL) and CWC/SWC by way of working capital demand loan.
Eligibility Any one dealing in commodities.
*CC facility will only be offered for limits of Rs 1 crore
and above
Eligible amount of Finance
Demand Loan: 75 % of the value of the warehouse receipt, valued at the market value OR
80% of the minimum support price declared by State/Central
Government, whichever is lower
Cash Credit: 70 % of the value of the warehouse receipt,
valued at the market value OR
75% of the minimum support price declared by State/Central
Government, whichever is lower
Assessment Assessment of limit for manufacturing units under Commodity backed WHR should be assessed under Assessed Bank Finance (ABF) and interchange of limit in
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between CC Hypothecation & WCDL against Warehouse receipt may be permitted. It should also be ensured that the projected stock level within the ABF does not exceed the quota of storage fixed by the respective Central/ State Government, if any, for the unit under finance.
Interest Rates (in Percentage
Loan category Interest Rate to be Charged
Upto Rs. 10 Lacs 0.50% Below SBAR Effectively 12.25%
Above Rs. 10 Lacs 0.25% Below SBAR
Effectively 12.50 %
Cash Credit: 0.25% Above SBAR; min rate 13.00% In addition to the above-mentioned Interest rates the ZCC will
have powers to reduce the interest rates on ‘demand loans in the
Rs. 10 lacs and upto Rs. 25 lacs category’ by 25 bps and ‘demand loans in the above 25 Lacs category’ and ‘cash credit
facility’ by 50 bps, based on competition and strength of
proposal.
SME/RC/Cir-33/20010-11 July 28, 2010
Tenure of Loan Rate of Interest
Upto 6 Months @ 2.50% above Base Rate
effective10.00% p.a.
Above 6 Months and
upto 1 Year
@ 3.00% above Base Rate
effective 10.50% p.a.
Processing charges Cash Credit: Rs.300/- per lac for the facility sanctioned Demand Loan: Nil where loan is sanctioned and disbursed Rs. 300 per lac in case the loan is sanctioned but the borrower does not avail.
Margin Demand Loan: 25% (minimum) of the value of the warehouse receipt, valued at the market value OR 20% (minimum) of the minimum support price declared by State/Central Government, whichever is higher. Cash Credit: 30% (minimum) of the value of the warehouse receipt, valued at the market value OR 25% (minimum) of the minimum support price declared by State/Central Government, whichever is higher
Insurance Comprehensive Insurance Insurance cost to be borne by the warehouse receipt owner.
Security
a) Primary Charge over warehouse receipt (resulting in charge over underlying goods), with lien marked in favour of the bank
b) Collateral Personal guarantee of partners or directors as the case may be.
Repayment Demand Loan: The loan should be liquidated as and when the produce is sold during the interim period not
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exceeding 12 months. Cash Credit: Repayable on demand. To be brought to credit balance and DP made Nil/reduced when the quality certificate expires.
Moratorium None. The loan would be repayable in a maximum period of twelve months. Interest as and when due would be payable.
Other terms and conditions
a) The Warehouse receipt should be duly marked lien in favour of the bank. b) The Branch should verify the authenticity of the warehouse receipt and get its lien noted with the warehouse before disbursal of the demand loan/ CC facility. c) For individual warehouse receipts of value over Rs 50 lacs and for limits over Rs 1 crore, the Branch should inspect the underlying commodity every three months at irregular intervals, within the validity of the quality certification. For smaller limits, periodical inspection of the commodity is waived. If, however, the conduct of the account is not satisfactory, such accounts require inspection by branch staff at monthly/quarterly intervals, as specified for similar advances. d) The margin shall be topped up on a fortnightly basis. However, it should be topped up immediately in case the price of commodity moves by more than 10%, in opposite direction, since last top up.
e) CC Limits and operating account will be different for different commodities handled by the same trader/customer. Inter-changeability in limits can be offered, if required.
Product Codes Product Description Segment Product Code
BR-WHR FINANCE CC SSI
SSI 6114-5301
BR-WHR FINANCE CC SBF
SBF 6124-5301
BR-WHR FINANCE CC C&I
C&I 6144-5301
STATE BANK OF INDIA
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Know Your Customer, Anti
Money Laundering and
Combating Financial
Terrorism Policy Board approved Policy to be read in conjunction
with the Operating Guidelines
Banking Operations Department
National Banking Group
Corporate Centre
Mumbai
For Internal Circulation only
The document is the approved Policy of State Bank of India in regard to Know Your Customer
Standards to be followed and measures to be taken in regard to Anti Money Laundering and
Combating Financial Terrorism. The document is current as on ________ and incorporates the statutory and regulatory guidelines issued in this regard upto the 1st July, 2008. This circular can also
be viewed and downloaded from SBI Times, Bank’s intranet site from the link “Policies”.
386
Policy on Know Your Customer Standards,
Anti Money Laundering and Combating Financial Terrorism Measures
INDEX
Pg.Nos.
1. Preamble 3
2. Objective, Scope & Application 3
3. Definition of Money Laundering 4
4. Obligations under Prevention of Money Laundering Act, 2002 5
5. Money Laundering – Risk Perception 5
6. Definition of a Customer 5
7. Key Elements of the Policy 6
7.1 Customer Acceptance Policy 6
7.2 Customer Identification Procedures 7
7.3 Small Deposit Accounts 8
7.4 Monitoring & Reporting of Transactions 9
7.5 Closure of Accounts 10
7.6 Risk Management 10
8. Employee Training 11
9. Recruitment/Hiring of Employees 11
10. Customer Education 11
11. Introduction of New Technologies 12
12. KYC for the existing accounts 12
13. Branches and subsidiaries outside India 12
14. Correspondent Banking 12
15. Miscellaneous 13
16. Principal Officer 13
17. Review of the Policy 13
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Policy on Know Your Customer Standards and
Anti Money Laundering/Combating Financial Terrorism Measures
1. Preamble
Reserve Bank of India has been issuing guidelines in regard to Know Your Customer
(KYC) standards to be followed by banks and measures to be taken in regard to Anti
Money Laundering (AML) and Combating Financial Terrorism (CFT). The
guidelines incorporate the:
• obligations cast on banks under the Prevention of Money Laundering Act
(PMLA), 2002
• recommendations made by the Financial Action Task Force (FATF) on AML
standards and CFT
• paper issued on Customer Due Diligence (CDD) for banks by the Basel
Committee on Banking Supervision
Banks are required to put in place a comprehensive policy framework, duly approved
by the Board of Directors, in this regard. This policy document has been prepared in
line with the RBI guidelines and incorporates the Bank’s approach to KYC, AML and
CFT issues.
2. Objective, Scope and Application of the Policy:
• The primary objective of the Policy is to prevent the Bank from being used,
intentionally or unintentionally, by criminal elements for money laundering or
terrorist financing activities. Purposes proposed to be served by the Policy are:
(i) To prevent criminal elements from using the Bank for money
laundering activities
(ii) To enable the Bank to know/understand the customers and their
financial dealings better which, in turn, would help the Bank to manage
risks prudently
(iii) To put in place appropriate controls for detection and reporting of
suspicious activities in accordance with applicable laws/laid down
procedures.
(iv) To comply with applicable laws and regulatory guidelines.
388
(v) To ensure that the concerned staff are adequately trained in
KYC/AML/CFT procedures.
• This Policy is applicable to all domestic branches/offices of the Bank and is to
be read in conjunction with related operational guidelines issued from time to
time.
• It shall also apply to the branches and majority owned subsidiaries of the Bank
located in countries which do not or insufficiently apply the FATF
recommendations, to the extent local laws permit. When local applicable laws
and regulations prohibit implementation of these guidelines, the same should
be brought to the notice of RBI. In case there is a variance in KYC/AML
standards prescribed by RBI and the host country regulators, braches
abroad/overseas subsidiaries will be required to adopt the more stringent
regulation of the two.
3. Definition of Money Laundering
Section 3 of PMLA has defined the “offence of money laundering” as under:
“Whosoever directly or indirectly attempts to indulge or knowingly assists or
knowingly is a party or is actually involved in any process or activity
connected with the proceeds of crime and projecting it as untainted property
shall be guilty of offence of money laundering”.
Money launderers use the banking system for cleansing ‘dirty money’ obtained from
criminal activities with the objective of hiding/disguising its source. The process of
money laundering involves creating a web of financial transactions so as to hide the
origin and true nature of these funds.
For the purpose of this document, the term money laundering would also cover
financial transactions where the end use of funds goes for terrorist financing
irrespective of the source of the funds.
4. Obligations under Prevention of Money Laundering (PML) Act 2002
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Section 12 of PMLA places certain obligations on every banking company, financial
institution and intermediary, which include
(i) maintaining a record of prescribed transactions
(ii) furnishing information of prescribed transactions to the specified
authority
(iii) verifying and maintaining records of the identity of its clients
(iv) preserving records in respect of (i), (ii) and (iii) above for a period of ten
years from the date of cessation of transactions with the clients.
These requirements have come into effect from the 1st July, 2005 i.e. the date on
which PMLA was notified by the Government of India and rules framed there under.
5. Risk Perception
Non compliance with KYC standards, use of the portals of the Bank for Money
Laundering/financing terrorism activities expose the Bank to various risks, such as
Operational Risk, Reputation Risk, Compliance Risk and Legal Risk etc.
.
6. Definition of a Customer
A customer, for the purpose of the Policy is defined as:
(i) a person or an entity that maintains an account and/or has a business
relationship with the Bank
(ii) one on whose behalf the account is maintained (i.e. the beneficial owner)
(iii) beneficiaries of transactions conducted by professional intermediaries, such as
Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the
law, and
(iv) any person or entity connected with a financial transaction.
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7. Key Elements of the KYC Policy
The KYC Policy of the Bank has the following key elements:
• Customer Acceptance Policy
• Customer Identification Procedures
• Monitoring of Transactions and
• Risk Management
While the Policy directions are given in this document, the detailed operating
guidelines are being issued separately which should be referred to for effective
implementation of the Policy.
7.1 Customer Acceptance Policy
Bank’s Customer Acceptance policy (CAP) lays down the criteria for acceptance of
customers. The guidelines in respect of the customer relationship in the Bank broadly
are:
(i) No account is to be opened in anonymous or fictitious/benami
name(s)/entity(ies)
(ii) accept customers only after verifying their identity, as laid down in Customer
Identification Procedures (discussed later)
(iii) classify customers into various risk categories and, based on risk perception,
apply the acceptance criteria for each category of customers. Also, a profile of
each customer will be prepared based on risk categorisation
(iv) Documentation requirements and other information to be collected, as per
PMLA and RBI guidelines/instructions, to be complied with
(v) Not to open an account or close an existing account (except as provided in
paragraph 7.5 of this Policy), where identity of the account holder cannot be
verified and/or documents/information required could not be
obtained/confirmed due to non-cooperation of the customer
(vi) Identity of a new customer to be checked so as to ensure that it does not match
with any person with known criminal background or banned entities such as
individual terrorists or terrorist organizations etc.
(vii) Implementation of CAP should not become too restrictive and result in denial
of banking services to general public, especially those who are financially or
socially disadvantaged.
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7.2 Customer Identification Procedures
Customer identification requires identifying the customer and verifying his/her identity
by using reliable, independent source documents, data or information. Thus, the first
requirement of Customer Identification Procedures (CIP) is to be satisfied that a
prospective customer is actually who he/she claims to be. The second requirement of
CIP is to ensure that sufficient information is obtained on the identity and the purpose
of the intended nature of the banking relationship. This would enable risk profiling of
the customer and also to determine the expected or predictable pattern of transactions.
Identification data, as under, would be required to be obtained in respect of different
classes of customers:
1. For customers that are natural persons:
a) Address/location details
b) Recent photograph
2. For customers that are legal persons:
a) Legal status of the legal person/entity through proper and relevant
documents
b) Verification that any person purporting to act on behalf of the legal
person/entity is so authorized and identity of that person is established
and verified
c) Understand the ownership and control structure of the customer and
determine who are the natural persons who ultimately control the legal
person
Wherever applicable, information on the nature of business activity, location, mode of
payments, volume of turnover, social and financial status etc. will be collected for
completing the profile of the customer.
Customers will be classified into three risk categories namely High, Medium and Low,
based on the risk perception. The risk categorization will be reviewed periodically.
The Customer Identification Procedures are to be carried out at the following stages:
o while establishing a banking relationship;
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o when the bank feels it is necessary to obtain additional information from the
existing customers based on the conduct or behaviour of the account.
o Customer identitification data (including photograph/s) should be periodically
updated after the account is opened. Such verification should be done atleast
once in five years in case of low risk category customers and not less than once
in two years in case of high and medium risk customers.
o Customer Identification will also be carried out in respect of non-account
holders approaching bank for high value one-off transaction as well as any
person or entity connected with a financial transaction which can pose
significant reputational or other risks to the Bank.
7.3 Small Deposit (No Frills) Accounts:
With a view to ensuring financial inclusion such that persons, especially those
belonging to low income group both in urban and rural areas, who are not able to
produce such documents required by the Bank to satisfy about their identity and
address, are not denied banking services, branches may open Small Deposit (No Frills)
accounts, for natural persons only, with relaxed KYC standards, as detailed in the
operating guidelines. Persons desirous of opening such accounts can keep aggregate
balances not exceeding Rs. 50,000/- (Rupees fifty thousand only) in all their accounts
taken together and the total credit, again in all accounts taken together, should not
exceed Rs. 1,00,000/- (Rupees one lac only) in a year.
If at any point, the balances in all his/her accounts with the Bank (taken together)
exceeds Rs. 50,000/- (Rupees fifty thousand only) or total credit in all accounts taken
together exceeds Rs. 1,00,000/- (Rupees one lac only) in a year, no further transactions
will be permitted until full KYC procedure is completed. Bank would notify the
customers when the balances reach Rs. 40,000/- (Rupees forty thousand only) or total
credit in a year reaches Rs. 80,000/- (Rupees eighty thousand only) so that appropriate
documents, for complying with full KYC requirements are submitted well in time to
avaoid blocking of transactions in the account.
7.4 Monitoring and Reporting of Transactions
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Monitoring of transactions will be conducted taking into consideration the risk profile
of the account. Special attention will be paid to all complex, unusually large
transactions and all unusual patterns, which have no apparent economic or visible
lawful purpose. Transactions that involve large amounts of cash inconsistent with the
normal and expected activity of the customer will be subjected to detailed scrutiny.
System supported monitoring of transactions will be done by the AML team under the
Principal Officer, based on alerts thrown up by the AML software acquired by the
Bank and on the basis of feedback/inputs from LHOs, Administrative Offices,
Regional Business Offices and respective relationship points. Simultaneously,
however, relationship points will maintain oversight over the transactions with a view
to identifying suspicious transactions and bringing them to the notice of the Principal
Officer.
After due diligence at the appropriate level in the Bank, transactions of suspicious
nature and/or any other type of transaction notified under PMLA will be reported by
the Principal Officer to Financial Intelligence Unit – India (FIU-IND), the appropriate
authority. A record of such transactions will be preserved and maintained for the
period as prescribed in PMLA.
Transactions in the accounts will also be monitored with a view to timely submitting,
the Cash Transaction Report (CTR) in respect of cash transactions of Rs. 10,00,000/-
(Rupees ten lacs only) and above undertaken in an account either singly or in an
integrally connected manner.
All cash transactions, where forged or counterfeit Indian currency notes have been
used, shall also be reported immediately by the branches, by way of Counterfeit
Currency Reports (CCRs) to the Principal Officer, through proper channel, for onward
reporting to FIU-IND.
7.5 Closure of Accounts
Where the appropriate KYC measures could not be applied due to non-furnishing of
information and/or non-cooperation by the customer, the account can be considered for
closure or terminating the banking/business relationship. Before exercising this option,
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all efforts will be made to obtain the desired information and, in the event of failure,
due notice, will be given to the customer explaining the reasons for taking such a
decision. The competent authority to permit closure of such accounts shall be the
Branch Head where the relationship level is RM-PB. In all other cases, Asst. General
Manager (Administration) at the respective Administrative office shall be the
competent authority to permit closure of such accounts.
7.6 Risk Management
While the Bank has adopted a risk based approach to the implementation of this
Policy, it is necessary to establish appropriate framework covering proper management
oversight, systems, controls and other related matters.
Bank’s Internal Audit of compliance with KYC/AML Policy will provide an
independent evaluation of the same including legal and regulatory requirements.
Concurrent/ Internal Auditors shall specifically check and verify the application of
KYC/AML procedures at the branches and comment on the lapses observed in this
regard. The compliance in this regard will be placed before the Audit Committee of the
Board at quarterly intervals.
The Principal Officer designated by the Bank in this regard will have overall
responsiblity for maintaining oversight and coordinating with various functionaries in
the implementation of KYC/AML/CFT policy. However, primary responsibility of
ensuring implementation of KYC/AML/CFT Policy and related guidelines will be
vested with the respective Business Groups/Circles/SBUs. Suitable checks and
balances in this regard will be put in place at the time of introducing new
products/procedures as also at the time of review of existing products/procedures for
overall risk and compliance management. For this purpose, each Business
Group/Circle/SBU will designate an official as Money Laundering Reporting Officer
(MLRO) who would ensure proper implementation and reporting, as per provisions of
this Policy, to the Principal Officer.
8. Employee Training
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All employee training programmes, of 6 days’ duration or more, will have a module on
KYC Standards/AML/CFT Measures so that members of the staff are adequately
trained in KYC/AML/CFT procedures.
9. Recruitment/Hiring of Employees
KYC norms/AML standards/CFT measures have been prescribed to ensure that
criminals are not allowed to misuse channels of the Bank. Bank will put in place
necessary and adequate screening mechanism as an integral part of its
recruitment/hiring process of personnel.
10. Customer Education
The Bank recognizes the need to spread awareness on KYC, Anti Money Laundering
measures and the rationale behind them amongst the customers and shall take suitable
steps for the purpose.
11. Introduction of New technologies
Bank will pay special attention to the money laundering threats arising from new or
developing technologies and take necessary steps to prevent its misuse for money
laundering activities. Bank will ensure that appropriate KYC procedures are duly
applied to the customers using new technology driven products.
12. KYC for the existing accounts
While the KYC guidelines will apply to all new customers, the same would be applied
to the existing customers on the basis of materiality and risk. However, transactions in
existing accounts would be continuously monitored for any unusual pattern in the
operation of the accounts. On the basis of materiality and risk the existing accounts of
companies, firms, trusts, charities, religious organizations and other institutions are
subjected to minimum KYC standards which would establish the identity of the natural
/ legal person and those of the ‘ beneficial owners’. Similarly, the Bank will also
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ensure that term / recurring deposit accounts are subject to revised KYC procedures at
the time of renewal of the deposits on the basis of materiality and risk.
13. Branches and subsidiaries outside India
This policy shall also apply to the branches, subsidiaries and majority owned joint
ventures located abroad to the extent local laws of that country permit. Based on this
policy, each foreign office is required to put in place an Anti-Money Laundering
Policy (duly approved), which shall also contain the KYC Guidelines and Suspicious
Transaction Reporting Procedures as may be required by the rules and regulations of
the host country.
14. Correspondent Banking
This policy will apply to our dealings with correspondent banks. For correspondent
banking relationship an appropriate due diligence procedure will be laid down keeping
in view KYC standards existing in the country where the correspondent bank is located
and the track record of the correspondent bank in the fight against money laundering
and terrorist financing.
15. Miscellaneous:
• Information collected from the customers for KYC compliance should be relevant
to the perceived risk, not intrusive and should be treated as confidential. The same
is not to be used/divulged for cross selling or any other such purpose.
• Any remittance of funds by way of demand drafts, mail/telegraphic transfer or any
other mode and issue of travellers’ cheques for value Rs.50,000 and above is
effected only by debit to customer’s account or against cheques/drafts and not
against cash.
• Provisions of Foreign Contribution (Regulation) Act, 1976, as amended from time
to time, wherever applicable, should be strictly adhered to.
16. Principal Officer
The Chief General Manager (Banking Operations) shall be the Principal Officer for
KYC/AML/CFT matters who shall be responsible for implementation of and
compliance with this policy. His illustrative duties, in this regard, will be as follows:-
• Overall monitoring of the implementation of the Bank's KYC/AML/CFT policy.
• Monitoring and reporting of transactions, and sharing of information, as required
under the law.
• Interaction with MLROs in Business Groups/SBUs for ensuring full compliance
with the Policy
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• Timely submission of Cash Transaction Reports (CTRs), Suspicious Transaction
Reports (STRs) and Counterfeit Currency Reports (CCRs) to FIU-IND
• Maintaining liaison with the law enforcement agencies, banks and other
institutions which are involved in the fight against money laundering and
combating financing of terrorism.
• Ensuring submission of periodical reports to the Top Management /Board.
17. Review of the Policy
The Policy will be reviewed as and when considered necessary by the Board.
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