• Rate of Interest

Limit

• 4.5 times of borrower's tangible net worth as per last audited/unaudited Balance sheet (Unaudited balance sheet may be accepted as per government of India Norms from time to time at present under section 44(AB) it is Rs.100 lakhs for Business entity and gross receipt of Rs. 50.00 lakh in case of professionals) OR Rs.5.00 Crores, whichever is lower.

Method of Assessment of Working Capital

• 20% of the projected sales subject to verification of GST return of previous years / quarters for existing units. The MSME units would be required to bring in margin money equivalent to 5% of their annual turnover or available net working capital, whichever is higher than the limits assessed under Turnover Method, as the guidelines stipulate bank finance at minimum of 20% of the projected turnover or computed on the basis of traditional method, whichever is higher.

Method of Assessment of Term Loan Limit

• 25% margin to be considered on purchase of plant & machinery, furniture& fixtures etc.
• 30 % on land and cost of construction of factory building
• Need base finance as per the project cost, subject to economic viability of the same and generation of sufficient income to service the repayment obligations.

Margin

• 25% of advance value of stocks &
• 40% on Book-Debts of up to 90 days old.
• 25% on purchase of plant & machinery, furniture& fixtures etc.
• 30% on land and cost of construction of factory building.

Period

• For Working Capital: -12- months, subject to review every year
• For Term Loan: Maximum -96- months, including -12- months of moratorium period

Security

• Exclusive charge on the assets of the enterprise.
• Personal Guarantees of all promoter/ Directors.
• Charge on the unencumbered personal properties of the partners, promoter Directors, wherever applicable.
• Third party guarantee in case of credit limit above Rs.20.00 Lacs as purpose cover under MUDRA loan up to Rs. 20.00 Lacs.
• It should also be ensured that loans limit up to Rs.200.00 lacs should be covered under the Credit Guarantee Scheme of CGTMSE, if applicable.
• Minimum Immovable Collateral or Liquid Security like NSC/KVP/FDR etc. to maintain asset coverage ratio above 1.50.

Valuation of Property

• In case of properties acquired within last -1- year, amount of Registered Sale Deed should be taken as value of property. (In such cases, fresh valuation may be dispensed with if the sanctioning authority is satisfied with Registered value).
• If the present Realisable value is higher than the Registered value (Registered within last 1 year) and if it requires to consider present Realisable value as value of property, for any reason, deviation to be obtained as per loan policy of the bank.

Age of building to be mortgaged

• The age of building should not exceed 25 years.
• Building more than 25 years old may be accepted as security, subject to approval of Regional Office, who will ascertain structural soundness of the building by obtaining opinion and certificate from approved engineer, about structural soundness of the building and its residual life. The residual life of the building should be at least 5 years more than the term of the loan / overdraft.

Insurance

• Comprehensive Insurance of Plant & Machinery, Equipment, Vehicle, furniture & fixtures & Goods covering stocks. Mortgage property and others movables. Bank's name should be included as a financer.

Credit Information Report

• Bank is authorized to make enquiries from any of the Credit Information Bureau and get the Credit Information Reports. Bank is also authorized to disclose from time to time any information relating to the loan to Credit Bureaus approved by Govt. of India or Reserve Bank of India without any notice to the borrower.

Other Terms & Conditions

• Sanctioning Authority to observe various Financial Ratios as per latest loan policy.
• Fixed Assets Coverage Ratio for term loan should be more than 1.00:1.
• Loans up to Rs.200.00 Lacs will be covered under Credit Guarantee Fund Scheme for Micro & Small Enterprises (CGTMSE), in absence of collateral security, If applicable.
• In case of takeover of accounts in addition to the product norms, the norms prescribed in latest Loan policy should be complied with.