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Definition of Small and Medium Enterprises


MSMED Act has defined Micro, Small and Medium Enterprises in both
manufacturing and Services sector as follows:

SECTOR MANUFACTURING SERVICES
  {Enterprises* engaged in Manufacturing or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act 1951} {Enterprises* engaged in proving or rendering services}
Micro Enterprises Where the investment in plant and machinery does not exceed twenty five lakh rupees
(currently called as tiny sector)
Where the investment in equipment** does not exceed ten lakh rupees (currently called as SSSBEs)
Small Enterprises @ Where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees Where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees
Medium Enterprises Where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees Where the investment in equipment is more than two crore rupees but does not exceed five crore rupees

* “Enterprise” means an Industrial undertaking or a business concern or any other establishment, engaged in the manufacture of production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services.
** “Equipment” means all instruments, office machines and such other electro mechanical or electronic appliances that are directly related to the service rendered but excluding furniture, fittings and other items not so related.
(@ Hitherto SSIs were units with investment limit upto Rs.1.00 crore and for select items upto Rs.5.00 crores. Now the investment ceiling has been increased to Rs.5.00 crores for all SSIs.
Hitherto services sector under SMEs were not defined, now defined.)

Time Norms for Disposal of SSI Applications :

Time - Bound Loans for Small Scale Industries

Loan Limit
Time for Disposal from the date of receipt of application complete in all respects.
Loans upto Rs.25,000/- 2 Weeks
Over Rs.25,000/- and upto Rs. 5 lakhs 4 weeks
Over Rs.5 lakhs 8 - 9 weeks
  • The exemption limit of SSI borrowal accounts for obtention of collateral security is Rs 5.00 lakhs
  • Based on good track record and financial position of the units the dispensation limit of collateral requirement for SSI loans is now extended upto Rs 25.00 lakhs
  • For loans sanctioned without collateral security/Third party Guarantee with limits upto Rs 25 lakhs, guarantee is available under Credit Guarantee Fund Trust Scheme for SSIs (CGTSI), “Borrower should bear the one time guarantee fee of 1.5% and the annual service fee of 0.75%”.
  • Composite loans upto Rs 100 lakhs is sanctioned to SSI units
Loan Quantum
  • Loan quantum /credit requirement would be assessed based on the norms of the Bank
  • Minimum 20 % of projected annual sales (Nayak Committee Norms) for working capital limits upto Rs 5 crores
  • Branch Managers empowered to sanction adhoc limits upto 20% of Working Capital Limits (both Fund based and Non-Fund based) This is also applicable to Medium Enterprises.
Interest rate structure

LIMIT
RATING

RATE OF INTEREST

Limits upto Rs 2 lakhs
NO RATING

BPLR - 1%, BPLR+TP -1%

Limits above Rs 2 lakhs
PRIME

BPLR
BPLR+TP

AAA

BPLR +0.5%
BPLR+TP +0.5%

AA

BPLR + 1%
BPLR+TP +1%

A

BPLR +1.5%
BPLR+TP +1.5%

OTHERS

BPLR + 2%, BPLR+TP +2%

 
PRESENT BPLR IS 12.5%

 

Incentives
  • One time cash incentive of Rs 10,000/- for ISO certified SSI borrowers.

Applicants should submit the applications as per format given below along with all the enclosures mentioned therein to the nearest Indian Bank branch for requests upto Rs. 10.00 lakhs

>> Click here for application format

Please approach the nearest branch for application forms for requests above Rs. 10.00 lakhs.

“Requests received for financing, without furnishing the full details in the prescribed format for the SSI advances, are liable to be rejected.”

 

For further details, please contact our nearest Branch Manager
 
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