1

Ser SME Basic Short Notes

1 Loan Policy
2 SME Delivery Model
3 Pre-Sanction Credit Process
4 Legal Aspects of Advances
5 Analysis of financial statement
6 Working capital assessment
7 Term Loan Appraisal
8 Credit Risk Management
9 Bank Guarantees
10 Letter of Credit
11 Preparation of proposals
12 SME advances and products
13 Post Sanction Process
14 Stressed Asset Management
15 Export & Import Finance
16 Abbreviation

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Loan Policy
The provisions of the loan policy are applicable to the domestic as well as international operations of the Bank.
➢ The Board has authorized the setting up of a Credit Policy & Procedures Committee (CPPC) at the Corporate
Centre for dealing with all matters relating to credit policy and procedures.
➢ All new loan products are also approved by Credit Policy & Procedures Committee (CPPC).
➢ Credit Risk Assessment models and Exposure Limits for various industries are approved by Credit Risk
Management Committee (CRMC) and Risk Management Committee of the Board (RMCB).
In order to ensure compliance, Risk Management Committee of each Business Vertical shall monitor
Quarterly
progress of reviewed products of their vertical, at __ intervals.
All loan products are to be reviewed … Biennially
The Loan Policy is reviewed once in a ….. by the Central Board Year
At apex level of the Bank which Dept./ Unit monitors the Country Risk exposure as per RBI
CRMD
guidelines?
The Bank recognizes the importance of Risk Adjusted Return on Capital (RAROC). The policy aims at
pricing the risk appropriately through RAROC. Aspiration by Business Verticals should be to achieve 20%
a minimum aggregate RAROC of ____%.`
International Financial Services Centres (IFSCs) shall be governed by the guidelines/instructions
RBI
issued by _____ from time to time.
R&DBG (Retail & Digital Banking Group) Branches would normally handle all Retail loans
including
i) All Personal Segment, e.g. Housing Loans, Auto Loans etc.
Rs. 50 Crore
ii) Agricultural loans under Agri Business Unit and
iii) Proposals pertaining to SME segment upto Rs. __., except schematic lending where specific
approval is in place.
CCG (Commercial Client Group) All exposures above Rs. …….. would normally come under
Commercial Clients Group (CCG) and Corporate Accounts Group (CAG). However, the threshold of
>Rs. 50 Cr
Rs. 50 Cr may be reduced for identified CCG branches for business consideration with the approval
of both MD (R&DB) and MD (CB&GM).
CAG: The Corporate Accounts Group has been created with the objective to ensure focus on the highest quality
relationships for the bank.
International Banking Group (IBG): The loan Portfolio of IBG comprises of
(i) Commercial Banking &
(ii) Retail Banking.
Commercial Banking comprises of India Based Loans, Trade Finance and Commercial Loans to local and other overseas
entities. Retail Banking Portfolio comprises of Housing Loans and other Retail loans to individuals in the respective
Host country.
Stressed Assets Resolution Group (SARG): With a view to bringing about better focus on management and
resolution of Non-Performing Assets, and assets under stress (including SMA-2), SARG has been set up.
Agriculture Business Unit (ABU): To drive and expand the Bank's business in rural and semi-urban areas, Agriculture
Business Unit has been set up to take care of the credit requirements for not only farming activity, but also for those
relating to agro based industrial activity, trade and services and for personal consumption needs of the target group
are addressed by the group.
➢ All products offered by the Bank for agriculture segment are in alignment with rules by and large prescribed by the
regulator, NABARD and the State Level Bankers’ Committee (SLBC).
Co-Lending by Banks and NBFCs to Priority Sector- The co-lending Bank will take their share of
20%
individual loans on a back to back basis in their books and NBFC shall be required to retain a

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minimum of ____% share of the individual loans on their books.

Bank provides end to end digitized loan products where sanctions are based on predefined rule Analytical
based _____. Engine
For Digital Loans, operational guidelines including limit amount, process of sanction(Physical/
Business Units
straight through process), monitoring mechanism etc. are defined by __
In the case of fully drawn term loan, where there is no scope for re-drawal of any portion of the Outstanding of
sanctioned limit, the Bank shall reckon the ……… as the Exposure TL
Economic interdependence criteria: Both the parties should be customers of the Bank and 5% of Tier-I
exposure of the bank in each of them is more than ____% of Tier-I Capital. Capital
While assessing the control relationship, the control relationship criteria is satisfied if one entity owns more than
50% of the voting rights of the other entity.
Identification of possible connected counterparties on the basis of economic interdependence shall be mandatory
in all cases where the sum of all exposures to one individual counterparty exceeds 5% of the eligible capital base
(i.e., Tier 1 Capital), and not in other cases.
Look Through approach (LTA) has been made mandatory in determination of relevant counterparties in case of
collective investment undertakings, securitization vehicles and other structures.
Prudential Exposure Norms (Large Borrower / Corporate){Large Exposure Framework (LEF)}
Nature of borrower / exposure Cap on Exposure (Prudential Norms)
Single Counterparty 20% of Bank’s Tier I Capital
Group of Connected Counterparties. 25% of Bank’s Tier I Capital
Single NBFC 20% of Bank’s Tier I Capital
Group of Connected NBFCs 25% of Bank’s Tier I Capital
Note: @ In exceptional cases, Board of the Bank may allow an additional exposure of the 5% of Bank’s Tier I Capital to
a Single Counterparty with the approval of Chairman.
Large borrower
➢ Large borrower is defined as the sum of all exposure values of the bank to a counterparty or a group of connected
counterparties is equal to or above 10% of the Bank’s Tier- I Capital.
➢ The aggregate exposure to all “large borrowers” should not exceed 800% of Bank’s Tier I Capital.
➢ CRMD will monitor exposure under Large Exposure Framework and put up review to RMCB at quarterly intervals.
➢ The exposure to Large Borrower shall be reported by CRMD to RBI, Department of Banking Supervision, Central
Office (DBS, CO) as per the RBI guidelines.
➢ Under LEF framework, an exposure to a counterparty will constitute both on balance sheet (accounting value of
exposure) and Off-Balance Sheet (by applying CCF with a floor of 10%) exposure included in either the banking or
trading book and instruments with counterparty credit risks.
Aggregate Sanctioned Credit Limit (ASCL): Means the aggregate of Fund based credit limits sanctioned or
outstanding, whichever is higher, to a borrower by the Banking System.
Banking System means all banks in India including RRBs and Co-operative Banks and branches of Indian Banks
abroad.
Willful defaulters can be declared, who is having loans of ___lakhs & above? Rs 25 Lakhs & above
Non-Cooperative Borrower can be declared, who is having loans of ___ Rs. 5 Crore and above
Willful defaulter is debarred from the Bank finance for floating new ventures for a period of
____ years from the date of removal of their name from the list of Willful defaulters as 5 years
published/disseminated by CICs.
Exposure on Single / Borrower Groups
Maximum ceiling on Exposure prescribed by Bank (Excluding facilities granted
Constitution of Borrower
against specified securities)

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Individuals as borrowers Maximum aggregate exposure of Rs. 100 Cr or its equivalent

Maximum aggregate exposure of Rs. 250 Cr or its equivalent
Non-corporates The above ceilings will also be applicable to the aggregate of all facilities sanctioned
to partnership firms which have identical partners.
Corporates As per the Prudential Exposure Norms prescribed by RBI.
Bank may extend Sole Banking facility for exposures up to Rs. _____ Cr Rs. 500 Cr.
In cases, where sole banking exposure exceeds Rs. 500 Cr, endeavour should be made to
bring the exposure under consortium. In consortium, our bank share may be a minimum of 10%
____% and participating banks limited to 10 (ten).
Exposures to SB-10 & below rated borrower shall be Maximum Rs. _____ Cr (However,
Rs. 1000 Cr.
products under schematic lending shall be guided as per the norms of the Scheme).
Substantial Exposure Limit
Types of Substantial Exposure Stipulation
Large Borrower (Single Counterparty or Group of Connected
10% of Tier I Capital
Counterparty)
Aggregate of substantial Exposures to Single Borrowers Not to exceed 300% of Tier I Capital
Aggregate of substantial Exposures to Borrower Groups Not to exceed 600% of Tier I Capital
Unsecured Exposure: RBI has defined unsecured exposure as an exposure where the realizable value of the tangible
security (primary plus collateral), as assessed by the Bank / approved valuers / RBI’s inspecting officers, is ab-initio not
more than 10% of the outstanding exposure.
➢ The Bank has adopted the above definition and it has been decided to restrict unsecured exposure (Domestic + IBG)
so defined to 30% of Bank’s outstanding total exposure (FB+NFB+Non SLR investment of Domestic and IBG).
➢ CRMD will submit quarterly reviews in this regard to the RMCB.
Term Loan Exposures
The CRMD will review term exposures (loans with residual maturity of over three years) at ______
Half-yearly
intervals with a view to ensuring that there is no Asset – Liability mismatch beyond the permissible limits.
The ALCO will decide the quantum of term exposures which can be taken in various time buckets, in April &
September each year
The tenor for scheme specific term loans (e.g., Housing Term Loan, Education loans etc.) should be as
per the approved schemes which can be a maximum of …. years. In other cases, it will be 20 years or 30 years
life of the Project whichever is lower (with a minimum tail period of 15%).
Term loan tenor (including moratorium) would normally be ___ years except cases under Rehabilitation
/ Core industry / infrastructure / Renewable Energy Projects / Housing Term Loans to individuals, 10 Years
Educational Loans and Agricultural Term Loans under approved schemes, etc.
Longer period project loans, where average maturity period exceeds 10 years, the sanction should
specifically provide for refinance option (call/ put). Such refinancing should normally not be more than 7 years
…...
Term Loans sanctioned and not availed within ___ from the date of sanction need revalidation 6 Months
Normally, term loan may be financed in the ratio of 70:30 for debt and equity, though ideally ____ is 67:33 is
preferred Ideal
Term Loans (loans with residual maturity of over three years) at any point of time should not in aggregate exceed
40% of the total advances of the Bank. A trigger for review is set when this limit reaches to 38% of the total advances
of the Bank.
Bank’s exposure to real estate (including residential mortgages, commercial real estate and indirect
33%
finance etc.,) will not exceed …….% of the Bank’s total advances
Prudential Limits on Intra-Group Exposure

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A) Single Group Entity Exposure

5% of Paid-up Capital and Reserves in case of non-financial companies and unregulated financial services companies.
10% of Paid-up Capital and Reserves in case of regulated financial services companies.
B) Aggregate Group Exposure
i) 10% of Paid-up Capital and Reserves in case of all non-financial companies and unregulated financial services
companies taken together
ii) 20% of Paid-up Capital and Reserves in case of the Group i.e. all group entities (financial and non-financial) taken
together.
➢ A quarterly report of Intra Group Transactions of Exposures (ITEs) of the Bank will be submitted by the Enterprise
and Group Risk Management Committee (EGRMC) to the Risk Management Committee of the Board (RMCB).
Non Fund Based facility (ies) not to exceed ______ % Bank’s total fund based exposure. Review of NFB
100%
facility to be carried out by CPPD at quarterly intervals, as hitherto.
In order to reduce Concentration Risk, the Bank shall endeavor to restrict exposure to an
15%
industry/Sector upto ____% of the Bank’s Total Domestic Exposure (TDE).
Sectoral/ Industry Exposure: The Bank shall endeavor to restrict domestic exposure to a particular
15% &
industry upto…………% of the Bank’s Total Domestic Exposure (TDE). The review of exposure shall be
CRMD
done by ……..
RAIL (Risk Adjusted Industry Limit) Framework have fixed Maximum Industry Exposure ceiling to be
200%
……% of Tier- 1 Capital of the Bank (to be within Loan Policy prescription of 15% of Bank’s TDE).
Further, considering the long gestation periods in the infrastructure sector, it is considered prudent to
cap exposure to that sector at …..% of the Bank’s total domestic exposure. Any waiver from the above 30%
ceilings is to be approved by ECCB.
…….. review shall be submitted to CRMC by CRMD Half yearly
Capital Market Exposure
➢ The Bank’s aggregate exposure to the capital markets shall not exceed 40% of its net-worth as on March 31 of the
previous year.
➢ MRMD, at quarterly intervals will undertake review of actual capital market exposure under the ceiling of 40% and
submit to ACB.
➢ Within the overall ceiling of 40%, Bank’s investment in shares, convertible bonds / debentures, units of equity-
oriented mutual funds and all exposures to Venture Capital Funds (VCFs) shall not exceed 20% of Bank’s net-worth
as on March 31 of the previous year.
➢ Within the overall ceiling of 40%, the Bank’s exposure to stockbrokers shall not exceed 10% of its net-worth as on
March 31 of the previous year.
Exposure to Leasing, Hire Purchase and Factoring Services: should be restricted to 10% of the Bank’s total
advances as at the close of the immediately preceding financial year.
➢ CRMD will put up the review to RMCB at Quarterly intervals.
➢ CRMD shall submit the review report of the exposure to ECCB at Half Yearly intervals.
Legal Entity Identifier: (LEI) is a 20 digit unique code that identifies every legal entity (across the globe) or structure
that is party to a financial transaction, in any jurisdiction.
➢ Obtention of Legal Entity Identifier (LEI) has been made mandatory by RBI for the Borrowers having total fund
based and non fund-based exposure of Rs. 50 Cr and above.
➢ For exposure above Rs. 5 Cr and upto Rs. 50 Cr, LEI will be implemented whenever RBI’s instructions are issued.
Financial Due Diligence:
i) The financials of the main company and its major associate / sister concerns should be reviewed, as far as possible,
on the basis of audited financials of the concerns on a common date.
ii) Balance Sheet should be free from any material adverse remarks of the auditors. Any adverse comments must be

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separately discussed in the evaluation / appraisal process.

iii) Verification of Income Tax, GST return etc. must also be ensured.
iv) Authenticity of the documents/ reports/ certificates etc. issued by Chartered Accountants is to be verified from the
link https://udin.icai.org with UDIN and key field provided by the certifying Chartered Accountants.
In terms of Section 20(1) of the Banking Regulation Act, 1949, the Bank cannot grant any loans and advances on the
security of its own shares. & also in terms of Section 20(1) of the Banking Regulation Act, 1949, the Bank cannot
grant loans and advances to the directors, and the firms in which they hold substantial interest, barring admissible
exceptions.
As per Section 19(2) Banking Regulation Act, 1949 The Bank shall not hold shares in any company, whether as
pledge, mortgagee or absolute owner, of an amount exceeding 30% of the paid-up share capital of that company or
30% of its own paid-up share capital and reserves, whichever is less.
Unless sanctioned by the Board of Directors/Management Committee, Bank shall not grant loans and advances
aggregating Rs. 25 lacs & above or its equivalent in respect of other than Personal Loans and Rs. 5 Cr & above in
respect of Personal Loans (#) to -
i) Directors (including the Chairman/Managing Director) of other banks (*);
ii) any firm in which any of the directors of other banks (*) is interested as a partner or guarantor; and
iii) any company in which any of the directors of other banks (*) holds substantial interest or is interested as a director
or as a guarantor.
The restrictions as contained in Section 20 of the Banking Regulation Act, 1949 would apply to grant of loans and
advances to spouse and minor / dependent children of the Directors of the Bank.
Unless sanctioned by the Board of Directors / ECCB, the Bank shall not grant loans and advances aggregating Rs. 5 cr
and above to:
i) any relative other than spouse and minor / dependent children of the Chairman / Managing Directors or other
Directors;
ii) any relative other than spouse and minor / dependent children of the Chairman/Managing Director or other
directors of other banks
iii) any firm in which any of the relatives other than spouse and minor dependent children as mentioned above is
interested as a partner or guarantor; and
iv) any company in which any of the relatives other than spouse and minor dependent children as mentioned above
hold substantial interest or is interested as a director or as a guarantor.
Temporary Overdraft of Rs. Up to ______ and casual purchase of cheque of Rs. ______ at a
Rs. 25000 & Rs. 5000/-
time is not treated as Credit Facility.
Bank shall not offer any Banking Products, including online remittance schemes etc. with
prizes/lottery/ free trips (in India/ or abroad). Etc., or any other incentives having an element Rs. 250/-
of chance, except inexpensive gifts costing not more than Rupees ____.
Arbitrage Operations: No credit facility directly or indirectly to stockbrokers for arbitrage operations in Stock
Exchanges shall be extended by the Bank.
No credit facilities shall be sanctioned against FDRs, or other term deposits of other banks.
No credit facility shall be sanctioned to the agent/intermediaries as against the consideration of deposit mobilization
by them.
Bank shall not extend finance for subscription to Indian Depository Receipts (IDRs) and shall also not grant any
loan / advance against security / collateral of IDRs issued in India.
The Bank shall not pay commission to staff members and officers for recovery of loans.
Loans against security of shares, convertible bonds, convertible debentures and units of equity oriented mutual funds
to individuals from the banking system should not exceed the limit of Rs.10 lacs per individual if the securities are held
in physical form, and Rs. 20 lacs per individual if the securities are held in dematerialized form.

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Bank shall not extend bridge loans against amounts receivable from Central/State Governments by way of subsidies,
refunds, reimbursements, capital contributions, etc. except the cases specifically permitted by RBI.
Shell Companies: Bank shall not grant any advance to any company which is found to be a shell company in terms of
its features resembling to those as advised by AML CFT Department.
For New Connections (Sanction): The Audited Financial Statements should generally be not more than 12 months
old from the date of close of the relative Financial Year.
In case the latest audited financials are more than 9 months old and upto 18 months, provisional financial
statements not more than 6 months old are to be obtained and analyzed and to be satisfied that the activity level,
profitability, liquidity and solvency ratios are broadly in alignment with the estimates/ projections.
No new connections are to be entertained if audited financials are more than 18 months old.
For Existing Connections:
➢ In case of listed companies, review/ renewal shall be carried out based on audited financials not more than 15
months old and unaudited financials not more than 6 months old.
➢ In case of unlisted borrowers, review/ renewal shall be carried out based on audited financials not more than 18
months old and provisional financials not more than 5/6 months old.
➢ No review/ renewal is to be permitted if audited financials are more than 15 months old for listed companies
and 18 months old for unlisted borrowers as the case may be and only continuation of working capital limits may be
permitted.
The Guidelines has been put in place for processing the request for large enhancement in working capital within 12
months of last sanction or during next renewal. Repeated enhancements between two renewals (within 12 months) to
be avoided.
W.e.f. 01.10.2019: Investment in Associates/Subsidiaries normally to be permitted only upto the extent of
“TOL/Adjusted TNW” does not breach the desired level of 4 in case of manufacturing sector and 5 in the case of
Trade and Services sector.
What percentage of the Corporate Guarantee extended by the company in favour of other companies for
20%
securing credit facilities to form part of total outside liabilities for the purpose of calculating financial ratios?
Internal Credit Rating – Credit Risk Assessment (CRA)
Applicable to = C&I, SME and AGL segments
Facility Rating in CRA is applicable for exposures of beyond Rs. 5 Crore
For exposure of Rs. 50 lacs and above and upto Rs.5 crores from Banking System, CRA shall not be required where
CUE rating is applicable.
Exposure upto Rs. 50 lacs from Banking System CUE lite will be used.
Exposures above Rs. 50 lacs and upto Rs. 5 Cr from the Banking system CUE rating shall only be Applicable
Exposure above Rs. 5 Cr and upto Rs. 50 Cr from Banking system Both CRA regular and CUE rating.
Exposure above Rs. 50 Cr from Banking System CRA regular applicable as hitherto.
Based on the CRA score, risk rating (SB-1 to SB-15) is awarded to the entity.
The SB-16 rating is assigned to NPA accounts by default.
CRA- Minimum scores / Hurdle rates:
➢ Hurdle rate SB-10 has been prescribed under internal risk rating model for considering new connection or
enhancement in credit limits.
➢ In case account is having CRA SB-11 and worse, subject to exceptions like availability of Central Govt. guarantee
(sovereign guarantees) and / or availability of a Corporate guarantee of parent / Group Company which should have a
CRA rating of SB-9 and better, necessary approval is to be obtained from the competent authority.
➢ However, no specific approval from Competent Authority is required to be obtained for continuation of limits at
existing or reduced levels when CRA is below hurdle rate.
Dynamic Review of rating. (Dynamic Trigger based: Dynamic Review of the rating to be conducted as and when

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Review of CRA is “purely subjective”, triggers are observed with exposure of Rs. 10 Crores & above but below Rs.
based on both qualitative and 500 crores.
quantitative information) Without Trigger: Dynamic Review of the rating to be conducted as and
when triggers are not observed with exposure of Rs. 500 Crores & above
(Half-yearly).
Review of CRA
➢ For units which are assigned CRA rating upto SB-10, CRA is to be reviewed annually.
➢ For units having CRA SB-11 and worse, Dynamic Rating will be carried out at half-yearly intervals.
External Credit Rating (ECR)
➢ External Credit rating is mandatory for all exposures above Rs_________ from Banking
Rs. 50 Cr
system?
➢ Who should approve the waiver of obtention of External Credit rating to borrowing units? Sanctioning authority
➢ At present there are seven (7) ECR Agencies namely CARE, CRISIL, India Ratings and Research Private Limited (India
Ratings), ICRA, Brickwork, SMERA and INFOMERICS are accredited by RBI
➢ Any waiver/ deferment for obtention of ECR is to be approved by the sanctioning authority not below RCCC.
➢ In case of ECCB sanction, such waiver is to be sought from CCCC.
➢ The approval for deferment of obtention of ECR permitted, if any, shall not be normally more than 6 months.
With a view to avoiding ‘Lenders’ Liability’, no branch/FO should give any verbal or in-principle commitment to lend
to a prospective borrower, FB or NFB facilities, unless detailed appraisal has been made and proper sanction is in place.
However, an in-principle quote/broad term sheet could be given in deserving cases with the approval of DMD of the
vertical.
Methods of Assessment of Working Capital
Traditional method Small loans upto Rs. 25 lakh.
➢ For the Limit amount up to Rs 5 Crores for the units engaged in manufacturing.
Turnover method ➢ Working capital requirement is computed at a minimum of 25% of turnover, of which, at
(Nayak Committee) least four-fifths is provided by the Bank and balance one-fifth represents the borrower’s
contribution towards margin for working capital.
➢ Tandon Committee has prescribed three alternative methods of computation of
Maximum Permissible Bank Finance (MPBF).
Projected balance
➢ This method is applicable for borrowers who are engaged in manufacturing, services and
sheet (PBS) method
trading activities and who require fund based working capital (WC) finance of above Rs. 5
crores or equivalent.
For assessing WC finance for seasonal industries like sugar, tea, etc. and for construction
Cash budget method
activity. For sanction of ad hoc WC limits.
Credit Underwriting Engine (CUE)
Project Vivek: This is applicable for all eligible SME proposals up to Rs. 50 Cr in R&DBG.
➢ Project Vivek launched from 01.08.2017.
➢ CUE is a new Risk Rating model for computing borrower rating on the basis of PD (Probability of Default).
➢ The CUE Rating Scale (CUE1 to CUE 15) has been mapped to existing CRA rating scale (SB1 to SB 15) one-to- one.
CUE has 7 independent modules.
Pace tool is being used for proposals of SME Borrowers eligible under Project Vivek with exposure of above Rs. 50.00
lacs to Rs. 50.00 crs.
PACE tool is Not Applicable in Greenfield Units.
The Working Capital facilities sanctioned but not availed within 6 months would lapse and need revalidation
Review/ Renewal of Advances:
➢ Working capital facilities are granted for a period of one year from the date of sanction. Regular and ad hoc credit

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limits are to be reviewed/ regularized not later than three months from the due date/date of ad hoc sanction.
➢ However, where the regular/ad hoc credit limits have not been reviewed/renewed within 180 days from the due
date/ date of ad hoc sanction, it will render the account as NPA.
➢ In case working capital, limits are not renewed for valid reasons, approval from the sanctioning authority needs to
be sought for review (continuation of limits) for a maximum period of 180 days from the due date. In case even after
expiry of this period of 180 days a full-scale renewal is not completed, approval needs to be sought from the
sanctioning authority for review (continuation of limits) for a further period of maximum 90 days. Within this time the
regular renewal proposal must be completed.
➢ The maximum period for which the credit facilities extended to a unit may be continued, based on reviews,
will thus generally not exceed 270 days from the due date.
➢ Even after the expiry of this period of 270 days from the due date a full-scale renewal is not found feasible,
administrative clearance is required to be sought from the next higher authority of the sanctioning authority
➢ The Guidelines has been put in place for processing the request for large enhancement in working capital within 12
months of last sanction or during next renewal. Repeated enhancements between two renewals (within 12 months) to
be avoided.
For units having CRA SB-11 and worse, ad-hoc/Short review will be carried out after 6 months from the date of
sanction based on the provisional financials not older than 3 months.
Adhoc limit: Adhoc limits will be considered in cases where Stand by Line of Credit (SLC) is inadequate either in terms
of quantum of finance (15% of sanctioned limits) or in respect of time span or where SLC is not in place
Export Credit:
➢ Export finance is by and large regulated through the directives / guidelines issued by the Reserve Bank of India (RBI),
Director General of Foreign Trade (DGFT) and the Foreign Exchange Dealers’ Association of India (FEDAI). Export
finance is broadly classified into two categories:
i) Pre-shipment finance and
ii) Post-shipment finance
➢ Pre-shipment finance is extended as working capital for purchase of raw materials, processing, packing,
transportation and warehousing of goods meant for export.
➢ The period for which the Bank gives packing credit depends on the manufacturing / trade cycle or specific
requirements of the individual export, normally not exceeding 180 days.
➢ Post Shipment Finance can be extended upto 100% of the invoice value of goods.
➢ The maximum period usually allowed for realization of export proceeds is nine months from the date of export, for
all exporters including Units in SEZs, Status Holder Exporters, EOUs, etc.
➢ Countries have been placed in 11 risk categories as per the risk perception.
➢ In respect of countries placed under “Caution”, branches are required to seek prior clearance from GMU-Kolkata for
all primary exposures on these countries.
➢ ECGC Ltd. provides insurance cover only up to the extent of 50% of claim amount in respect of bills drawn on
Associate concerns, under WTPS policy.
➢ In respect of countries placed under “Caution”, branches are required to seek prior clearance from GMU-Kolkata for
all primary exposures on these countries.
Deferred exports are those where the realization period exceeds 180 days, with certain exceptions. All deferred
exports are subject to regulatory guidelines contained in Project Export Manual (PEM) published by RBI.
➢ The complete list of exporters and their associates placed in the Specific Approval List (SAL) is available on the
website of ECGC Ltd.
➢ Bank will not take any exposure on ARCs
Foreign Currency Exposures (other than ECBs and Export Finance):
A. Small Borrowers with aggregate exposure of upto Rs. 50 Cr from banking system

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B. Large Borrowers with aggregate exposure of more than Rs. 50 Cr. from banking system
The policy on Hedging of Forex Exposure is to be reviewed by CPPD annually and put up to Central Board.
Take Over Norms
Rating criterion:
i) For exposures up to Rs. 5 Cr or its USD equivalent from the Banking System: CUE rating of the borrower should
be CUE-7 or better (SB-7 or better if not processed though project Vivek).
ii) For exposures above Rs. 5 Cr and up to Rs. 50 Cr or its USD equivalent from the Banking System: CRA of the
borrower should be SB-7 or better.
iii) For exposures above Rs. 50 Cr or its USD equivalent from the Banking system:
➢ ECR of the borrower for the existing exposure should be BBB (not BBB-) or better.
➢ The ECR for the enhanced exposure will have to be obtained within a period of 6 months.
➢ Audited Balance Sheet (ABS) should not be older than 12 months. If ABS is older than 9 months and upto 18
months old, provisional financials not older than 6 months are to be obtained.
➢ Takeover is not permitted if ABS is more than 18 months old and no deviation shall be permitted in this regard.
Collateral Security
a. It must be ensured that the existing security with the Bank (transferor) is maintained and no dilution in existing
security coverage is permitted for the amount taken over.
b. In case Takeover is with enhancement/sanction of additional facilities, the collateral cover for additional credit
facilities sanctioned should be as per the norms prescribed by the Bank.
c. Substitution of existing security given to other Banks may be permitted for justifiable reasons by the sanctioning
authority.
Only such accounts should be targeted for Takeover where the unit is in commercial operations for at least two years
(one year in case of Infrastructure projects) and no major green field / brown field project is under implementation.
The unit should have been earning profits for at least 2 preceding years except Infrastructure projects for which it will
be 1 year after COD as per the last audited balance sheet.
Stock and Receivables Audit: It is to be conducted prior to disbursement of any credit facilities above Rs. 5.00 Cr
except for units having CRA rating of SB-5 and better.
Increase in exposure (working capital only): It should not exceed 25% at the time of take over from other Banks.
However, this cap is not applicable for the companies:
i. Externally rated “A-” and better for the consecutive past two years for the borrowers whose exposures is above Rs.
50 Cr or its equivalent from Banking System and
ii. CRA 5 or better for the exposures upto Rs. 50 Cr or its equivalent from Banking System.
However, in case the borrower has ECR, the rating should be A- and better.
Authority structure for waiver
Proposal falling within the sanctioning power of Sanctioning & Approving Auth.
i) Cases of past default / Caution List / OTS / restructuring / rehabilitation etc., ECCB.
ii) Any other waiver except [Rating criterion, CRA and other Takeover norms]
a. RCCC/FOCC VII.
a. Proposals sanctioned by Credit Committees below RCCC up to FOCC VII.
b. Proposals sanctioned by RCCC/ FOCC VII/ CCSC/ IBGCC-II/ IBGCC b. Sanctioning Authority
c. Proposals sanctioned by ECCB c. CCCC.
A written communication should be obtained from existing bank indicating the up to date dues on payment of which
all the securities held (including release of personal/corporate guarantees) held will be released in favour of our Bank.
Security should be Created and perfected within 90 days of disbursement.
Consortium / Multiple Banking Arrangement (MBA):
a. The Following shall not be considered as Take over of Advances from Another Bank and as such take over norms
shall not be applicable:

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i) when we join a consortium as an additional member or

ii) When we join a consortium and exposure of an existing member is taken over partly / wholly or
iii) When we join MBA to take additional exposure or
iv) Enhancement/ additional facility where we are already part of Consortium/ MBA
In all such cases, operating units should ascertain IRAC status of the borrower from the existing bankers on the IBA
specified format.
b. However, when we join or increase our share in MBA in order to replace an existing member exposure either in
whole or in part, all the norms relating to Takeover of advances will apply.
➢ Takeover norms would apply even if borrower offers to liquidate existing credit facilities before disbursement by
our Bank. However, if there is a time gap of say 2 months between liquidation of existing facilities and disbursement
by our Bank, the Takeover norms would not apply.
➢ Validity of the sanction under Takeover cases shall be 3 months from the date of conveying sanction.
➢ The above takeover norms are not applicable to AGL segment for which separate norms have been prescribed.
➢ These norms are also not applicable to Public Sector undertakings (PSUs) under Central Government and PER
segment Loans &schematic lending such as Lease Rental Discounting (LRD), ABL and ABL (CRE) etc.
Norms for Takeover of advances under Agriculture segment
All agricultural Term loans and agricultural cash credits with other Banks and Agricultural Credit Societies, Co-
operatives are eligible for takeover, subject to the fulfillment of the following terms and conditions of Take over.
Minimum amount eligible for takeover are:
Nature of Facility Amount
ACC Rs. 1 lakh
ATL– for Allied Activities Rs. 10 lakhs
ATL for other than allied activities Rs. 2 lakhs
The maximum amount eligible for takeover would be Rs. 2 crores. However, administrative clearance should be
obtained from CLCC for loans above Rs. 2 crores and upto Rs. 5 crores and from RCCC for loans above Rs.5 crores.
1. No prior administrative clearance is required for takeover of agricultural loan.
2. No dilution in the security in takeover proposals is permitted.
3. Only Standard Assets and regular accounts are eligible for takeover. The account should have been a standard
account in the books of the other banks/Financial Institution (FI) during the preceding 2 years.
4. The term loans of incomplete nature are not eligible for takeover.
5. ATLs with a minimum 2 years repayment program left are only eligible.
6. Advances to borrowers falling outside the ‘Service Area’ of the branch are also permitted for takeover, subject to
adherence of the other instructions.
7. Crop loans converted to Term Loans and Term Loans, which are rephased, are not eligible for takeover irrespective of
their quantum.
Additional norms for takeover of Agriculture Loans of Rs. 50 lakh & above
➢ The advances to be taken over should be rated SB-7 or better (the unit should score at least 60% in the financial
parameters).
➢ The unit should have earned net profits post tax in each of the immediately preceding 2 years
Takeover of “P” segment advances is permitted as per the guidelines issued from time to time by the Business Units
(PBBU/REHBU).
Pricing of Loans
First review of all taken over accounts beyond Rs. 5 Crores is required to be put up by the branch concerned, to the
respective sanctioning authorities, as the case may be, immediately after 6 months from the date of sanction. Full-
fledged renewal of working capital limits and annual review of term loan accounts should be done at annual intervals
from the date of sanction as usual.

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Perfection of securities must be completed within ____days of disbursement = Takeover – 90 Days & Normal – 6
months.
ATL having residual repayment period of 2 Years is eligible for takeover.
Pricing Tool: A pricing tool named DIPAK (Digital Interface for Pricing and Knowledge Capture) has been rolled
out for better pricing negotiations with corporate customers and shall be applicable for borrowers with exposure
(FB+NFB) of Rs. 50 Cr and above.
External Benchmark based Lending Rate (EBLR): It has been decided to use External Benchmark for pricing all its
new floating rate Personal or Retail loans and floating rate loans to MSMEs w.e.f 01.10.2019.
External Benchmark Rate has been linked with RBI’s Repo Rate. Thus, the interest rate under external benchmark shall
be reset at least once in three months.
➢ EBR will be reset on the 1stday of every Calendar Quarter on the basis of prevailing RBI Repo Rate.
Marginal Cost of Funds based Lending Rate (MCLR):
All rupee loans sanctioned and credit limits renewed w.e.f. April 1, 2016 are priced with reference to the MCLR which is
the internal benchmark for such purposes. Actual lending rates are determined by adding the components of spread to
the MCLR. No lending below the MCLR of a particular maturity for all loans linked to that benchmark.
At present, reset frequency of Working Capital Loans (except WCDL) and Term Loans with Floating rates is linked with 6
Month MCLR with the same reset frequency i.e., 6M.
The following categories of loans shall be priced without being linked to MCLR as the benchmark for determining
interest rate:
i) Loans against Bank’s own Term Deposits.
ii) Loans to Bank’s own employees including retired employees.
iii) Loans granted to the Chief Executive Officer / Whole Time Directors.
iv) Loans linked to a market determined external benchmark.
v) Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL), etc. granted as part of the
rectification/restructuring package.
vi) In specified schemes, as advised by RBI/GoI/GoI’s undertakings, wherein Bank have to charge interest rates as per
the scheme.
vii) Fixed rate loans of tenor above 3 years..
ALM Department is responsible for computation of the MCLR/ Base Rate/SBAR. Approval is accorded by the Asset –
Liability Management Committee of the Bank. Review of MCLR of different maturities is done every month.
The Executive Committee of the Central Board (ECCB) has full powers for sanctioning credit facilities.
Primary Security: Primary security is the asset created out of the credit facility extended to the borrower and / or
which are directly associated with the business / project of the borrower for which the credit facility has been extended.
For example, hypothecation of stocks, book debts etc. Stocks include Raw Materials, Stock in process, Finished Goods,
Spares etc.
Collateral Security: Collateral security is any security, other than Primary Security, offered to additionally secure the
credit facilities sanctioned by the Bank. Collateral security is normally obtained as a risk mitigating measure and to
sustain the promoters’ interest in the venture.
Wherever, Collateral security from third party is obtained, personal/corporate guarantee of owner of collateral security
is desirable.
For MSE Sector (both Manufacturing and Services enterprises) no collateral security is to be obtained for loans upto
Rs. 10 lacs, and for loans above Rs. 10 lacs and up to Rs. 15 lacs the sanctioning authority may consider waiving
collateral security subject to compliance with certain conditions.
➢ For this sector, the Bank has decided to cover all eligible SME advances upto Rs. 200 lacs (manufacturing and
services) and upto Rs. 100 lacs (retail trade) under CGTMSE scheme.
➢ The cost of guarantee i.e., Annual Guarantee Fee (AGF) shall be borne by the borrower for all loans (CC &TL)

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sanctioned on or after 01.07.2017 (irrespective of the amount, including renewal of Cash Credit facilities).
CGTMSE has introduced “Hybrid Security” product, wherein collateral security can be obtained for a part of the credit
facility whereas remaining part of credit facility, upto a maximum of Rs. 200 lacs (manufacturing and service) and upto
Rs. 100 lacs (retail trade) can be covered under CGTMSE scheme.
Advances to non farm enterprises in Manufacturing, Trading and Services with credit limits upto Rs. 10 lacs are
normally classified under Pradhan Mantri Mudra yojana (PMMY) and covered under Credit Guarantee Fund for
Micro Units (CGFMU).
Agriculture segment, waiver is generally permitted for loans upto Rs. 1,60,000/- (Rupees One Lac sixty thousand
only) though there are scheme specific ceilings in this regard.
Pledge of Shares: Section 19 (2) of the Banking Regulation Act, 1949 states as under: - “Save as provided in sub-
section (1), no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner,
of an amount exceeding 30% of the paid-up share capital of that company or 30% of its own paid-up share capital
and reserves, whichever is less”.
Where the number of properties is in excess of 10 (Ten), a notional discount @5% is to be applied on the aggregate
“Realizable Value” of the properties and the discounted value should be considered while calculating the security
coverage in the credit proposal.
If sanctioned facilities are sought to be released on the basis of standalone documentation, pending Sanctioning
Consortium documentation, approval for such arrangement should be obtained from the …………... Authority
Unconditional Cancellability
Unconditional Cancellability clause, which gives the Bank the right to cancel the sanctioned limit without reference to
the borrower at any time, needs to be accepted by borrowers.

The undrawn portion of cash credit/ overdraft limits sanctioned to the Borrowers having aggregate fund based working
capital limit of Rs. 150 Cr and above from the banking system, irrespective of whether unconditionally cancellable or
not, shall attract a credit conversion factor of 20%.
Corrective Action Plan for Stressed Assets (CAPSA): Reporting irregularity for confirmation and Review of SMAs.
Agencies for Specialised Monitoring (ASM): Applicable for large borrowers with total exposure above Rs. 250 Cr
exposures from Banking system.
Early Review of Sanctions (ERS)
➢ ERS is overseen by the Internal Audit Department, and covers review of all loans.
Total Exposure above Rs. 1.00 Cr and
Early Review of Sanction (Small Loans- SL)
upto Rs. 20.00 Cr.
Early Review of Sanction (Large Loans- LL) Total Exposure above Rs. 20.00 Cr.
Early Review of Sanction is conducted within how many months of
3 to 6 months
sanction/renewal?
Risk Focused Credit Audit (RFCA)
➢ Covers all Credit Auditable Accounts (CAAs) (including LC Bill Discounting limits whether it is on stand-alone basis or
sanctioned as part of the existing limits) with total credit exposure (FB+NFB limits) above Rs. 20 Cr or its equivalent
and above.
➢ However, take over advances (accounts with exposure of Rs. 10 Cr and upto Rs. 20 Cr are to be covered under
Risk Focused Credit Audit for the first audit and will be subsequently covered under RFIA.
Legal Audit is mandatory for all exposures of Rs. ______. Rs 5 crores and above
Even after adopting e-auction, if it is found that the response is not adequate or for any other reason, the Tribunals are
free to choose other method it may consider appropriate for sale of property of the defaulters.
Prudential framework for Resolution of Stressed Assets
i) The framework is applicable to borrowers with aggregate exposure of Rs. 2000 Cr and above from 07.06.2019 and

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for aggregate exposure of Rs. 1500 Cr and above from 01.01.2020.

ii) A review of the stressed account is to be carried out within 30 days of default (Review period). A timeline of 180
days after the review period is provided for implementation of resolution plan.
iii) Disincentive for delay in implementation of Resolution plan (RP): Where a viable Resolution plan is not implemented
within the timeline given below, additional provision is to be made as under:
Timeline for implementation of viable RP Additional provisions to be made as % of outstanding, if
RP is not implemented within time -line
180 days from end of review period 20%
365 days from the commencement of review period 15% (i.e., total additional provision of 35%)
iv) The additional provisions may be reversed as under:
a. Where the RP involves only payment of over-dues by the borrower – the additional provisions may be reversed
only if the borrower is not in default for a period of 6 months from the date of clearing of the over-dues with all the
lenders.
b. Where RP involves Restructuring / Change in Ownership outside IBC – the additional provisions may be
reversed upon implementation of the RP
c. Where resolution is pursued under IBC – half of the additional provisions made may be reversed on filing of
insolvency application and the remaining additional provisions may be reversed upon admission of the borrower under
Corporate Insolvency Resolution Process (CIRP),
d. Where assignment of debt / recovery proceedings is initiated – the additional provisions may be reversed upon
completion of the assignment of debt / recovery.
Bank is to submit the following returns on Borrowers’ exposure of Rs. 5 crores and above to RBI – Central Repository
of Information on Large Credits (CRILC).
a. CRILC main Report – Monthly and
b. Borrower entity in default- Weekly.
All auctions through DRTs and SARFAESI should be conducted electronically to help break cartelization in auctions, by
using the following modules:
i) Receipt of online technical bids
ii) Reverse e Auction – to be used for procurements
iii) Forward e Auction – to be used for disposal of assets by the Bank including those under DRT and SARFAESI.
Bank can resort to sale through private treaty when sale through e-auction fails. The minimum number of attempts of
sale through e-action before going for sale through private treaty is as under:
Value of property No. of attempts
Upto Rs. 1 Cr 1
Above Rs. 1 Crore 2
Project Finance and Structuring Strategic Business Unit (PF&S SBU)
➢ Threshold limits for appraisal of proposals of Infrastructure & Non – Infrastructure projects and criteria for reference
of projects to PF&S SBU are set as under:
Sectors Threshold limit – Project Cost
Infrastructure Above Rs 250 cr
Non-Infrastructure Above Rs 750 cr
➢ Project Finance & Structuring Strategic Business Unit (PF&S SBU) normally monitors and controls of sanctioned
project loans up to 2 years after DCCO for infrastructure projects and 9 months after DCCO for renewable
projects like Wind and Solar projects.
➢ In case of non-infrastructure projects/ commercial projects, control of such accounts continues to vest with
PF&S SBU for a period of six months after DCCO or upto stabilisation of the project, whichever is later.
➢ Project Finance proposals, of above Rs. 1000 Cr from Bank shall require to be put up to Interim committee for

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structuring as part of in-principle approval.

➢ Interim Committee: An interim committee has been constituted under the chairmanship of CGM, PF&S SBU that
will evaluate the structure proposed by the structuring team and finalise it. The structuring team will only clear the
proposed structure and not take any sanctioning decisions.
Exit Policy
➢ Eligible Accounts: All Standard accounts (including SMA–0, SMA-1 and SMA-2) irrespective of External rating.
➢ Threshold Limit: The Policy shall be applicable to accounts with exposure of Rs. 5 Cr and above across all Business
Verticals.
➢ The status / review of accounts identified for Exit should be put up to the Controllers not below the rank of GM,
every month from the date of approval for Exit.
Cut-off Limits for Identification of Wilful Defaulter Rs. 25 Lac or its equivalent
➢ No additional credit facilities to be granted to the listed wilful defaulters.
➢ In addition, such companies (including their entrepreneurs / promoters) where banks / FIs have identified siphoning
/ diversion of funds, misrepresentation, falsification of accounts and fraudulent transactions is debarred from the Bank
finance for floating new ventures for a period of 5 years from the date of removal of their name from the list of
Wilful defaulters as published/disseminated by CICs.
➢ The remedial measures approved by the Controllers are to be complied with by the borrower within a maximum
of 90 days from the date of approval.
➢ After the expiry of 90 days, the Branch will examine the compliance position and the measures taken by the
Borrowing Unit.
➢ If no improvements are effected in terms of adherence to the remedial measures, the account is to be recommended
for exit.
➢ The recommendations will be submitted by the Branch Head, to the Controllers within the next 15 days.
➢ The Controllers may allow an additional time of 3 months from the date of approval for compliance by the Borrower/
Promoter/ Guarantor.
Non-Cooperative Borrowers
➢ Definition: A Non-Cooperative Borrower is one who does not engage constructively with the Bank, defaulting in
timely repayment of dues while having ability to pay, thwarting Bank’s efforts for recovery of their dues by not
providing necessary information sought, denying access to assets financed/collateral securities, obstructing sale of
securities, etc.
➢ The cut off limit for classifying a borrower as non-cooperative is aggregate fund- based and non-fund-based
facilities Rs. 5 crore or its equivalent from the Bank.
➢ Bank will report information on all Non-cooperative borrowers classified as per the laid down procedure to RBI
under CRILC-Main return every month.
➢ A review of the status of all Non-cooperative borrowers has to be conducted half-yearly and any proposal for
declassification should be put up to Review Committee (2nd Committee) with the recommendations of Identification
Committee (1st Committee).
➢ Removal of names from the list of Non-Cooperative Borrowers will be separately reported under CRILC with
appropriate reasoning/rationale for such removal.
Issue of Look Out Circulars (LOC): The recourse under LOC may be taken to prevent borrowers/ promotors/ whole
time directors/ guarantors of the defaulting companies/ units from leaving the country to escape from criminal
prosecution where the loan outstanding (fund based and non fund based) of not less than Rs. 50 Crore from the
Banking system.
RCC will have three members and will be headed by RM (RBO) and will consist of (i) Chief Manager (Risk &
RCC Compliance) as a compulsory member and (ii) Any another member being any Chief Manager in the RBO /
Chief Manager of local /nearest branch of the RBO.

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ZCC will have three members and will be headed by DGM (B&O) and will consist of two members - AGM
ZCC
(SME)/ RMs (RBO) /AGM (Direct branch)/AGM(SMEC/RASMEC)
headed by DGM & CCO (representing non-business) with DGM (B&O), on rotation-basis representing
CLCC
business).
LCCC Headed by CGM
SME Delivery Model
To improve the connect with the Customers and to develop SME Business, a new position of AGM (SME) has been
created at the identified AOs.
AGM (SME) will report to DGM (B&O).
Branches with SME Advances, Fund Based Exposure of Rs. 30 Cr and above are categorized as SME Intensive
branches.
Under AGM (SME) at AO, two teams each headed by a Chief Manager: Chief Manager (Credit & Business
Development) and Chief Manager (Operations & Asset Quality) have been created.
With regard to RM (SME), CMC of the Circle may take a call for reduction in the lower cut-off of Rs. 50 lacs, but not
below Rs. 25 lacs.
With respect to Non-BPR Centres, in case RM (SME) is not posted in the centre/locality, RACC should handle all SME
Loan Proposals.
Collection Team will perform hard recovery for loans below Rs…... 20 lacs
NPA accounts of Rs……… will be migrated to SARB. 20 lacs and above
All the loan proposals with limits ……. will be sanctioned by CM/Manager-Sanction up to Rs. 50 Lacs
RM (SME) AMT will handle SME loans.……. in BPR Centre. above Rs. 50 Lacs
Each RM (SME) team will handle maximum …. CIFs. 25
The proposals above the financial powers of DGM (B&O) shall be referred to …… CRD/CCRD
………… will handle SME loans upto Rs. 50 lacs including Govt. Sponsored Schemes. If the Retail Asset Credit
branch is not mapped with RACC, SME loans upto Rs. 50 lacs will be handled by Branches. Centre (RACC)
RACC model, branches are categorized as under:-
1. Spoke Branch- spoke branches are non-BPR branches upto Scale IV linked with RACCs for sanctioning/
maintenance of their loans.
2. Hub Branch– Hub branch is the branch where RACC is functioning. Hub branch will be treated like any of Spoke
branch for RACC.
3. RACC– RACC will be the centralized processing/ sanctioning/ maintenance centre for its linked (spoke) branches.
The RACC will be headed by …… of the Hub branch Chief Manager (Scale
IV)
Financial Powers of Chief Manager (Branch) in Non-BPR Centre stands revised to Rs. …… in 50 lacs
respect of SME Loan Proposals.
Loan Proposal above Rs. 50 lacs are to be sanctioned by …..at AO. AGM (SME)
Pre-Sanction Credit Process
Account based relationship includes all types of loan accounts, non-fund based accounts like Bank Guarantee, Letter of
Credit etc. and all type of deposits accounts.
The Provident Fund contribution deducted from the employees of an establishment/ firm 20th
during a particular month are normally remitted to the Employees Provident Fund
Organisation (EPFO) by the … of the following month by the company/firm concerned.
List of Disqualified Directors available on the website of Ministry of Corporate Affairs (MCA) http://www.mca.gov.in.
Identification of borrower and site must be ascertained beyond doubt by inquiring from neighbors and other
surrounding people
………. have been identified as preferred CICs for obtaining report for proposal pertaining to CIBIL and CRIF High

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MSME / C&I segment. Mark

Type of Advances Report from one CIC Report from two CICs
Unsecured Loan Limit upto Rs.2 lacs Limit > Rs.2 lacs
Secured Loan Limit upto Rs.10 lacs Limit > Rs.10 lacs
For all loans of Rs……. , branches / operating units / processing cells should obtain statement 25 lacs and above
of assets and liabilities
Opinion Reports on Borrower / Guarantor
When a party’s means are estimated at He should be reported as having (Rating)
Upto Rs.1.00 lac Very small means
Above Rs.1.00 lac to Rs.4.00 lacs Small means
Above Rs.4.00 lacs to Rs.10.00 lacs Moderate means
Above Rs.10.00 lacs to Rs.25.00 lacs Fair means
Above Rs.25.00 lacs to Rs.1.00 crore Good means
Above Rs.1.00 crore to Rs.10.00 crores Very good means
Above Rs.10.00 crore to Rs.25.00 crores Large means
Above Rs.25.00 crores Very large means
The statement of assets and liabilities is required to be obtained in the form of notarized affidavit in case of the
following types of loans:
New loans For all loans rated (SB-
9) and worse.
Existing loans - renewal / enhancement For all loans rated (SB-
9) and worse.
Existing loans - rehabilitation / restructuring In all cases
Time norms and other guidelines for monitoring disposal of credit proposals:
Particulars TAT
All loans upto Rs.25 lac 14 days
Loans of Rs.25 lac and above upto Rs.50 lac 14 days
Sanction in case of takeover 14 days
Time norms for RM (SME)
Limits above Rs.50 lac upto Rs.5 Crore 22 days
Limits above Rs.5 Crore 22 days
Legal Aspects of Advances
Private company must have a minimum paid-up capital of Rs…… 1.00 lakh
Public company has a minimum paid up capital of Rs. ……. 5.00 lacs
Private company minimum of …. Members and a maximum of ….members. 2, 200
A public company must have a minimum of ….. members. 7
A Government company is one in which not less than …..% of paid up share capital is held 51%
by the Government (Central / State).
Whenever any changes take place in partnership firm, necessary formalities are completed two
within a period of ….. months.
A ….. can be a partner of a partnership firm, however he cannot be held liable personally for Minor
any debt of the firm.
An HUF is represented by the head of the family, known as….., and the members of the HUF Karta, coparceners
are known as …...
Valuation Report to be submitted by the valuers invariably contains the Fair Market Value, Book Value, Realizable

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Value and the Distress Sale Value of the property being valued.
For loans above Rs. 1.00 Crore wherein primary/collateral offered as security is valued 2
above Rs. 50.00 lacs, valuation reports (not older than 3 months for new connection) from
.... empanelled valuers are to be obtained.
Value of the property is below Rs ....., single valuation is to be obtained. 50.00 lacs
If the difference between market value and realizable value quoted by two valuers is 5%
more than .....% and reckoning the lower of the two valuations is not acceptable to the
borrower, a third valuation may be obtained.
The number of properties offered as security exceeds 10 (ten) and are located at diverse 5%
locations, a notional discount of ....% is to be applied on the realizable value of the
properties and the discounted value should be considered while arriving at the security
coverage.
In case of variation of ....% or more between the market and realizable values as per the 20%
valuation and the guideline value provided in the State Government notification, Income
Tax Gazette, justification on the variation has to be provided by the Valuer.
Fresh Valuations are to be obtained every .... years. 3
The valuation report should be less than ..... year old for sale of properties under Private 1 year
Treaty / SARFAESI Act, 2002 and Settlement of dues through compromise.
The second valuation report should be obtained only if the value of property is Rs ...... in 1 crore and above
case of compromise settlement & fixation of Reserve Price under SARFAESI Act, 2002
Under simplified SME documentation __is not provided? Supplemental guarantee
Obtention of two TIRs
i. Properties offered by third party guarantors whether individual or non-individual.
ii. Properties acquired through Gift deed.
iii. Properties sold by Power of Attorney holders to our borrower/guarantor.
iv. In case of Housing Loans where properties do not fall into the abovementioned categories, a satisfactory Title
Investigation Report (TIR) from two different empanelled advocates should be obtained in the following cases:
a. In respect of Housing Loans where the RERA registration is available and Loan amount is above Rs. 5 crores
b. In respect of Housing Loans where RERA registration is not available and Loan amount is Rs. 1 crore and above
c. Second Sales and Loan amount is Rs. 1 crore and above.
➢ In case Home Loan of Rs. 1 Crore & Above: Two Title Investigation Report (TIRs) should be obtained from two
different empanelled Advocates of the Bank. Two Valuation Reports from different empanelled Valuers of the Bank
should be obtained and lower value out of the two valuations should be considered for assessment of the eligible
loan amount.
➢ In respect of all cases where the loan amount is less than Rs. 1 crore, the advocate has to make search of the title of
the property for not less than 13 years if it establishes clear and marketable title. However, if the flow of title is not
clear or in the event of any ambiguity about the title after search for 13 years, the Advocate may make search for not
less than 30 years.
➢ In respect of all cases where the loan amount is Rs. 1 crore and above, the advocate has to make search of the title
of the property for not less than 30 years irrespective of the fact that clear and marketable title is established by a
shorter search of 13 years.
➢ In case of Builder Tie Ups (in case of Home Loans), for approval of the project, search of the title for not less than
30 years is mandatory.
➢ Scrutiny of Gift Deed and POA by Bank’s Law officer will be waived in respect of loans up to Rs. 1 crore.
➢ Whenever any property is taken as security (primary / collateral) based on Gift Deed as the principal title deed,
clearance must be obtained from the Law Department without fail.

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SME Documentation
SME-1 = Arrangement Letter
SME-2 = Agreement of Loan cum Hypothecation
SME-2A = Letter furnishing the particulars of assets acquired after the execution of SME-2
SME-3 = Guarantee Agreement
SME-4 = Supplemental Agreement of loan cum Hypothecation
SME-5 = Memorandum for recording creation of mortgage by deposit of title deeds
SME-6 = Letter of confirmation for creation of mortgage by deposit of title deeds
SME-7 = Memorandum for recording extension of mortgage by deposit of title deeds
SME-8 = Letter of confirmation for extension of mortgage by deposit of title deeds
SME-9 = Deed of Mortgage
SME-10 = Deed of further charge
SME-11 = Revival letter
SME-12 = Link letter
Where all the Original title deeds are not available, minimum previous .... transactions / sale / Two
title deeds should be obtained from the borrower along with a declaration explaining the non
availability of the original title deeds in respect of past transactions to the satisfaction of Bank.
Laminated original title deeds: The intending mortgagor must give a public notice in one 15 days
leading national and in one regional newspaper stating that in case any party has any claim
towards the properties, the same should be lodged with the intending party and also with the
stated branch of SBI, within ….. days of publication of the notice.
To safeguard the interest of the Bank, a letter confirming the deposit of the title deeds with intent Registered Post
to create the mortgage in favour of the Bank as security for the advances should be obtained from
the mortgagor(s). It would be preferable to arrange with the borrower to have this letter (Inland
letter) sent by?
Where the mortgagor is a limited company, this confirmatory letter need not be obtained.
CERSAI is a Government of India Company licensed under section 8 of the Companies Act, 2013 with 51%
Govt. of India having a shareholding of …..% by the Central Government and select Public Sector Banks
and the National Housing Bank also being shareholders of the Company.
Registration of charges with CERSAI: Immediately after creation of mortgages, the security interest 30 days
has to be registered with the Central Registry within …….
Maximum within ….. days with permission from ROC along with justification 300 days
After 300 days, condonation of delay can be allowed by …… only Central govt.
Analysis of financial statement
Accounting Standards (AS) are formulated by the Accounting Standards Board (ASB), constituted by the Institute of
Chartered Accountants of India (ICAI) in 1977.
There are __ items in the CARO, Companies (Auditor's Report) Order, 2016, on which, the Auditors 16
have to give their specific comments.
CMA with respect to analysis of financial statements is Credit Monitoring Arrangement
Form-I Details of borrower and credit facilities (existing & proposed) along with the details of Associate /
Subsidiary concern
Form-II Operating Statement (Profit and Loss Account)
Form-III Analysis of Balance Sheet (Liabilities and Assets)
Form-IV Comparative statement of Current Assets & Current Liabilities
Form-V Fund Flow Statement
The CMA is being prepared for 4 years’ data i.e. last two years actual audited data, current year estimates and

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projections for the next year.

Who are responsible for preparation of Financials Statements? Management of the business entity
What should be the first action on receipt of Audited Financial Statements? Confirm about the genuineness of the
financial statements
Why the liabilities should be analyzed first then assets? Because liabilities are the sources of fund and we want to
know about sources first
How the Adjusted Tangible Net Worth is calculated? Net Worth – Intangibles – Investments and Loan &
Advances to Associates
Why Fund Flow Statement is prepared? To check the liquidity and diversion of fund
Patent should be classified as ………… in the Balance Intangible Assets
Sheet?
Important Financial Statements – Balance Sheet & Profit & Loss Statement
Balance Sheet – Statement of assets and liabilities of a concern as on a particular date
Asset – What the business entity owns
Liabilities – What the business entity owes
Asset (4 parts) Current Assets, Non Current Assets, Intangible Assets and Fixed Assets
Liabilities (3 parts) Current Liabilities, Term Liabilities and Net worth
Likely to be converted into cash in 12 months
Eg. = Cash and Bank Balance, Investments, Stock (Raw Material, Stock in Process and
Finished Good), Sundry Debtors, Pre-Paid Expenses (Insurance Premium Paid, Advance Tax
Current Asset Paid, etc)
Exceptions – 1. Sundry debtors outstanding up to 6 months only are classified as Current
Asset, outstanding beyond 6 months are classified as Non-Current Asset
2. Investment in Bank’s TDR are classified as Current Asset irrespective of Period of Deposit
If the trade receivables are more than 6 months old from the date of invoice, it is treated
as deferred trade contrary to the provisions of Companies Act and to be classified as Non-
Current Assets.
Non-Current Asset Non-current Assets are those assets, which are not directly supporting the operating
activities generally but required for the operations
Eg. = security deposits, investment in associate/subsidiary concerns, long term investments
with a lock in period, deferred receivables / slow moving / old / obsolete inventories
Miscellaneous Asset Advance to employees, Investment in associate firms, Investment in equity shares
which are being created from the funds deployed in the business but do not have any
physical existence.
which are invisible / cannot be touched but having monetary value therefore considered as
Intangible Assets
an asset.
Preliminary Expenses, Patents and Goodwill, Licenses, Research & Development Expenses,
Licenses, Mining Rights, Brands, Trademarks, Deferred Tax Assets,.
those assets, which are of long term nature and can be used during a period of more than
one year.
Eg. = Land & Building, Plant & Machinery, Furniture & Fittings, Office equipments, etc. Fixed
Fixed Asset assets go through wear and tear on their use.
Depreciation by Straight Line Method (SLM) or Written Down Value Method (WDV) is
applied on these assets every year. Depreciation is a non cash expense to the business
entity.
Current Liabilities dues of the firm payable within 12 months from the date of balance sheet

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Eg. = Bank Borrowings (Cash Credit, Overdraft, etc), Sundry Creditors, Advance Payments
Received from customers, Term Loan Installments due within 12 months
dues of the firm Payable after one year from the date of balance sheet. Source for
acquiring Fixed Assets, Supporting accumulated losses and raising working capital margins.
Eg. = Term Loan from Bank & FIs, Debentures, Deferred Credit from supplier of Capital
equipment’s, Deposits from Public (Repayable beyond one year).
Term Liabilities
Term Liabilities are repaid out of Cash Accrual (Profit after Tax + Depreciation + Other Non
Cash expense)
If the remaining maturity of Preference shares is less than 12 years, then it should be
classified as Term Liabilities instead of part of Net Worth.
Paid-up Capital and Reserves & Surpluses including share premium
Net Worth
Tangible Net Worth (TNW) = Net worth – Intangibles assets
The most commonly used method for analysing the financial statements is ratios.
Ratio Analysis Financial Ratios can be classified broadly under four heads
i) Current Ratio = Current Asset/Current Liabilities
ii) Quick or Acid test ratio = (Current Assets – Inventory) / Current liabilities
(a) Liquidity Ratio
iii) NWC or Margin or Liquid Surplus = (Long Term Sources – Long Term Uses) or (Current
Asset – Current Liability).
i) Debt Equity Ratio = Debt / Equity or Term Liabilities / Tangible Net Worth
ii) Financial Leverage Ratio = Total Outside Liabilities/ Tangible Net worth
(b) Solvency Ratio iii) Debt Service Coverage Ratio = (Profit After Tax + Depreciation + Interest on
TL)/(Principal
Repayment of TL + Interest on TL)
i) Assets Turnover Ratio = Net Sales/Net Tangible Assets
ii) Stock Turnover Ratio = Cost of goods sold (COS)/ Average Inventory
COS = Net Sales – Gross Profit
(c) Activity Ratio Average Inventory = (Op Stock + Closing Stock)/2
iii) Debtor’s Period = Average Sundry Debtors/Average daily credit sales
Average Sundry debtors = (Opening + Closing Debtors)/2
iv)Creditor’s Period = Average Sundry Creditors/ Average daily credit purchases
i) Return on Investment (ROI) = (Profit after Tax/ Total Tangible Assets) x 100
(d) Profitability Ratio
ii) Return on Equity (ROE) = (PAT / Tangible Net worth) x 100
Working capital assessment
Gross Working Capital is better known as total funds required to complete an operating cycle
Net Working Capital (NWC) = Current Assets – Current Liabilities or
Short Term Uses – Short Term Sources or
Long Term Sources (LTS) - Long Term Uses (LTU)
Other Current Liabilities (OCL) are Current Liabilities excluding Bank Borrowings.
Working Capital Gap (WCG) Total Current Assets – OCL (Other Current Liabilities)
Operating Cycle has been defined in the Companies Act, 2013, Schedule III as “An operating cycle is the time
between the acquisition of assets for processing and their realization in cash or cash equivalents.
Annual Consumption of Raw Annual Purchases of Raw Material + Opening Stock of Raw Material- Closing Stock
Material of Raw Material.
Cost of production Consumption of Raw Material + Consumables Spares & Stores + Power & Fuel +
Direct Labour + Repairs & Maintenance + Other manufacturing Expenses +
Depreciation + Opening stock of SIP - Closing Stock of SIP.

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Cost of Sales (Cost of Goods Cost of production + Opening Stock of Finished Goods - Closing Stock of Finished
Sold during an accounting year) Goods.
Various Methods for Assessment of Working capital
1. Traditional method
2. Projected Annual Turnover Method (Nayak Committee).
3. Projected Balance Sheet Method (PBS / ABF)
4. Cash Budget Method
5. Project Vivek
Normally, the liquid surplus or NWC should be at least 25% of the working capital requirement (corresponding to
the benchmark current ratio of 1.33).
Projected Annual Turnover Method (Nayak Committee)
➢ PAT popularly known as Nayak Committee Method, is applicable for Assessment of Working Capital Requirement for
the WC Limits up to Rs. 5 crores for units, engaged in manufacturing.
➢ Working capital requirement is computed at a minimum 25% of the projected annual turnover, out which, at least
four-fifth (80%) should be provided by the Bank and the balance one-fifth (20%), representing the borrower’s
contribution towards margin for the working capital, should be financed by the borrowers.
➢ In view of the demonetization and to encourage the MSME Units to shift to digital mode or
cashless transactions, the Working capital Limits of MSME units will be assesses at 31.25% of the Projected Annual
Turnover and unit will be sanctioned limit to a minimum 25% of the projected annual turnover and an amount
equivalent to minimum 6.25% will be brought in by the borrower as margin.
➢ Later, revised that WC limits of such MSME units (availing Fund Based Working Capital limits upto Rs. 5 crores) be
assessed at 37.50% of the projected annual turnover and the unit be sanctioned a limit of a minimum 30% of the
projected annual turnover after stipulating a margin of 7.50% of the turnover, to be brought in by the borrower.
PBS method: The projected Bank borrowing thus arrived at is termed as ‘Assessed Bank Finance’ (ABF). This method is
applicable for borrowers who are engaged in manufacturing, services and trading activities and who require fund based
working capital (WC) finance of above Rs. 5 Crores.
Cash Budget Method: A cash Budget is therefore a projection of future cash flows as against the cash flow statement
Project Vivek: exposures above Rs.50 lacs uptoRs.50 crores
Term Loan Appraisal
A term loan may be granted for any period in excess of THREE years but normally not exceeding twenty years from
the date of first draw down.
(a) The tenor for scheme specific Term Loans should be as per the approved schemes subject to a maximum period of
30 years.
(b) In other cases, it will be 20 years or project life whichever is lower (with a minimum tail period of 15%).
(c) Average maturity should invariably be calculated for all term loans individually and mentioned in the template. It is
not applicable for term loans having EMI based repayment programme.
(d) The Average maturity of any term loan , including moratorium, normally should not exceed 10 years, except loans
under Rehabilitation / Core Industry / Infrastructure / Renewable Energy Projects / Securitization of Rent and Toll
Receivables.
(e) An additional interest of 50 bps will be charged in respect of all non EMI term loans, if average maturity exceeds
10 years.
(f) In cases where average maturity of term loan exceeds 10 years, the deviation may be permitted by the Sanctioning
Authority.
Appraisal have four important parts: Economic Viability, Technical Feasibility, Financial Feasibility and Commercial
Viability.
Technical feasibility: If the project involves a new process or new technology, a technical feasibility report by a

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competent outside agency, acceptable to the Bank will be essential.

In case of a project involving only expansion or modernisation, a technical feasibility report by an outside
agency may not be insisted upon, provided that the technical expertise available within the company is considered
adequate for the purpose.
Factors to be considered in the Technical Feasibility are:
• Location of plant & accessibility to critical inputs
• Size of the plant
• Type of technology
• Production factors (power, water, utilities, transport etc.)
• Availability of Labor (Skilled / Unskilled)
Factors to be considered in Economic Viability are:
• Thorough market analysis
• Future trends in volume and patterns of Supply & Demand
• Demand forecast, Supply position, Gap
• Intermediate product
• Ancillary industry
Financial Feasibility: Under financial feasibility, we should examine and comment on the basically two parameters viz.
Cost of Project and Means of Finances.
Preliminary expenses are those expenses, which are incurred before the incorporation of the company.
Capital issue expenses are those expenses, which are incurred to raise capital from the market.
Pre-operative expenses are those expenses, which are incurred during the period between incorporation of the
company and commencement of commercial production, which is after the trial run. Thus, the expenses during trial run
can also be considered under this head.
Under financial feasibility, we should examine and comment on the basically two parameters viz. Cost of Project
and Means of Finances.
➢ Internal Rate of Return (IRR) is rate at which the sum of the discounted cash flows is equal to the investment
outlay.
➢ The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows equal to Zero in
a discounted cash flow analysis.
Break Even Point (BEP): In a manufacturing unit, if at a particular level of production, the total fixed cost equals the
contribution (total sales revenue minus total variable cost), this point is known as Break Even Point (BEP).
➢ It can also be calculated in (%) = "Fixed Costs / Contribution X 100"
➢ In the calculation of break even point, contribution means = Sales-variable cost
➢ So the mathematical formula to find BEP. = Fixed Cost / (Sales - Variable Cost)
Credit Risk Management
Basel Committee on Banking Supervision (BCBS) in their Basel II accord has elaborated three types of risks viz.
Credit Risk, Operational Risk and Market Risk, under Pillar 1 (component on Minimum Capital Requirements).
Credit Risk Assessment (CRA) Model is mandatory for all accounts with Aggregate Exposure (Fund Based + Non
Fund Based) of Rs. 500.00 Lacs and above for both Non-Trading Sector (C&I, SSI and AGL segments), Trading Sector,
Services and Construction Sector, which includes lending under various schemes of the Bank.
Bank has been developing scoring models for all products with exposure of less than Rs. 50 lacs.
Different Models for Risk Rating:
(a) Credit Risk Assessment Models for Trade, Non-Trade, Services and Construction Sectors
(b CRA Models for NBFCs/HFCs
(c) Rating Model for Infrastructure projects (RAMIP)
Type of Ratings

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➢ Regular Model for exposures above Rs. 5.00 Crore Borrower Rating
Facility Rating
➢ Simplified Model for exposure above Rs. 0.50 Crore to Rs. 5.00 Crore Borrower Rating
External Credit rating is mandatory for all exposures above Rs_________ from
Rs. 50 Cr
Banking system?
PACE tool is Not Applicable in Greenfield Units. (Used for proposal > Rs. 50 lakhs to Rs. 50 Crore)
Bank Guarantees
➢ BG is a contract to perform the promise or discharge the liability of a third person in case of default.
The parties to the contract of guarantee are:
(a) Applicant: The principal debtor – person at whose request the guarantee is executed
(b) Beneficiary: Person to whom the guarantee is given and who can enforce it in case of default.
(c) Guarantor: The person who undertakes to discharge the obligations of the applicant in case of his default. So bank
is playing the role of guarantor in case of BG is issued by it.
Bank guarantee (BG) is a collateral contract or secondary contract between bank & beneficiary which is based on a
primary contract between Beneficiary and applicant.
Classification of Bank Guarantees:
(a) Financial guarantees, attract a CCF of 100%
➢ The most commonly used Financial bank guarantees are Guarantees for mobilization of advance, Guarantees in
respect of raw material supply.

(b) Performance guarantees, attract a CCF of 50%.

➢ The most commonly used performance guarantees are EMD, Bid Bonds & Retention money Guarantee.
➢ BGs will generally be issued / renewed for a period not exceeding ____ months at any one instance = 18 Months.
➢ For longer periods, authority structure for according administrative clearance is in place. Should a BG originally
issued for a lesser period require extension beyond 18 months, administrative clearance there for will also be
necessary.
➢ Bank may consider issuing BGs beyond maturity of 10 years only against 100% cash margin or with prior approval
of the competent authority specified in this regard.
➢ No Bank Guarantee should, normally, have a maturity of more than ten years.
➢ The claim period of Bank Guarantees (fresh or extension) shall invariably be specified, minimum of one year from
the date of expiry of validity period.
➢ Any further extension of the existing BG is to be made with a minimum claim period of 1 year from the date of
expiry of validity period of BG.
➢ Period Angle Clearance (PAC) need not be obtained in case of BGs (maximum period upto 10 years) with 100% or
more cash margins except in case of Foreign BGs.
The face value of units accepted as the equivalent of cash margin for NFB exposures should be equal to 125% of the
cash margin stipulated.
Request from the applicants for extension/renewal of guarantee to be entertained provided there is no change in the
amount and other terms and conditions of the guarantee.
BG can be amended as in the case of any other contract, with the consent of all the parties concerned and there is no
restriction under law or guidelines of RBI for such amendment.
Letter of Credit
➢ Issued by the buyer’s Bank at his request.
➢ Carrying undertaking to pay to the seller a certain amount of money.
➢ Upon presentation of documents, evidencing shipment of goods, as specified, and compliance of other t & c.
Letter of credit is a trade settlement method where LC issuing bank guarantee payment to the beneficiary (seller of the

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goods) provided beneficiary submits documents which are complying presentation.

The set of documents can be complying only if it is as per:
(i) Letter of credit terms,
(ii) UCPDC 600 guidelines issued by ICC Paris
(iii) As per international standard banking practices terms (ISBP compiled by ICC Paris).
➢ Letter of Credit has Four parties.
➢ Our Bank issues only Irrevocable LC
➢ Importer is called applicant while seller is called beneficiary under letter of credit mechanism.
➢ LC issuing bank issues LC while advising bank advise the LC to exporter.
➢ Nominated bank receives the presentation of the documents from seller while negotiating bank can give advance
against the export bill.
➢ Nominated bank or negotiating bank can be same or different.
➢ 'INCOTERMS' stands for International Commercial Terms.
➢ UCPDC stands for Uniform Customs and Practice for Documentary Credits
If payment of bills under LC is allowed by permitting irregularity in cash credit then irregularity in cash credit should
be regularized within 15 days.
Documentary letter of credit: The payment is made by the negotiating bank to exporter against this letter of credit
when a full set of documents specified in the letter of credit is handed over by the exporter.

Revocable letter of credit: can be withdrawn by the opener (importer) or opening bank (importer’s bank) at any time.
Withdrawal can be effected without notice to the exporter.

Irrevocable letter of credit: cannot be withdrawn without prior permission and intimation of the exporter.

Clean letter of credit: no condition for payment to be made

Assignable letter of credit: letter of credit which can be easily transferred by the exporter with its rights in favor of any
person. Therefore, exporter can assign this letter of credit to any person.

Non-assignable letter of credit: cannot be transferred in favor of any person. Only the beneficiary who is named in
the letter alone can get the payment.

Revolving letter of credit: when the export transaction between the same parties is regular and continuous. Credit can
be availed against one and the same letter of credit for all subsequent export transactions. There is no need to open a
separate letter of credit for every export transaction again and again.

Confirmed letter of credit: which confirms credit.

Back to back letter of credit: Merchant exporter purchases goods from the manufacturer for the purpose of export.
Such exporter requests opening bank to open the letter of credit in favor of such manufacturer or supplier. The
manufacturer or supplier gets the money directly from the importer.

With recourse letter of credit: the paying bank can hold the exporter responsible for recovery of payment if the
importer fails to reimburse it to the paying bank.

Without recourse letter of credit: the exporter cannot be held responsible if the importer does not reimburse the

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paying bank. In such an eventuality, the paying bank has the recourse to the importer only.

Red clause letter of credit: the exporter can getadvance money from the negotiating bank.

Green clause letter of credit: provides an arrangement for the storage of goods at the port. Pre-shipment finance
and storage facility are available to the exporter.

Restricted letter of credit: The importer may insist that shipping docu-ments be negotiated (transferred) through a
specified bank only.
Preparation of proposals
Depending upon the exposure and purpose for which the sanctioning authority is being approached, under noted
formats have been prescribed
Format name Detail Purpose
Form S2 For Exposure from Rs. 25 lacs up to Rs 1 Cr
Form DDS For total exposure above Rs 1 crore up to Rs 50 crore from the banking system
Form DD For exposures above Rs 50 crores from the banking system will be known as “Loan Proposal
Due Diligence Format”.
Form S (For total exposure of above Rs 50 crore from the banking system) (Extracted from form DD by
LLMS Loan Proposal Sanction Format, which will be put up to the Sanctioning / Approving
Authority
From M Loan Proposal Modification Format, is used for Modifications etc., (i.e. Change in terms and
conditions (Pricing / Security / Margin / Covenants and other matters), Sanction of Adhoc limits
and Interchangeability of limits)
SME advances and products
MSME Classification
Classification Investment & Annual Turnover
Micro Investment does not exceed Rs. 1 cr. & Turnover does not exceed Rs.5 cr
Small Investment does not exceed Rs. 10 cr. & Turnover does not exceed Rs.50 cr.
Medium Investment does not exceed Rs. 50 cr. & Turnover does not exceed Rs.250 cr.
CGTMSE - Credit Guarantee Fund Trust For Micro & Small Enterprises
a) Micro & Small Enterprises as per MSMED Act eligible
b) Credit guarantee for MSE loans up to Rs. 2 Crore for Manufacturing and Services
c) For retail traders upto Rs. 1 Crore.
Salient Features
c) Credit granted to Educational/ Training institutions and SHGs are not eligible for
coverage.
d) All fund/non-fund based facilities are covered
a) The AGF for Cash Credit and Term Loan Accounts above Rs. 50 lacs, sanctioned on or after
17.06.2014 and for all Term Loans, irrespective of amount sanctioned on or after 01.12.2015 has
to be borne by the borrower. The AGF for Cash Credit limit upto Rs.50 lacs are being
absorbed by bank.
b) The AGF/ASF for all loans (irrespective of amount) sanctioned on or after 01.07.2017 must
Payment of fee
be borne by the borrower.
c) Demand for AGF would be generated by 2nd week of February every year. AGF so
demanded would be paid by the MLIs on or before 15th April each year.
d) Amount on which the AGF will be calculated will be as under:-
- Term Loan: Outstanding as on 31st Dec against each guaranteed amount.

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- Working Capital: maximum (peak) working capital limit availed by the borrower/enterprise
in the previous calendar year.
Time norm for
lodging of Application for guarantee cover can be lodged with the Trust for credit facilities sanctioned in a
application for particular calendar quarter, latest by the end of the next calendar quarter.
guarantee cover:
Annual Guarantee Fee (GF) at specified rate is to be paid to the Trust within 30 days from the
Time norm for date of Demand Advice Notice (DAN) generated by CGTMSE or from the date of first
payment of AGF disbursement of credit extended by the Bank to a borrower whichever is later but within 30
days from the date of DAN.
The extent of Guarantee coverage under CGTMSE
Above Rs. 50
Upto Rs. 5 L Above Rs. 5 Lakhs to 50 L
Lakhs to 200 L
75% of the amount in default
85% of default, Max- 4.25 75% of the amount
Micro Enterprises subject to a maximum of
Lakhs in default
Rs.37.50 lakh
Women entrepreneurs (other
than credit facility upto Rs.5 lakh 80% of default, Max-40 Lakhs
to micro enterprises)
75% of the amount in default subject to a maximum of
All other category of borrowers
Rs.37.50 lakh
50% of the amount in default subject to a maximum of
Retail Traders upto Rs.100 lakh
Rs.50.00 lakh
Pradhan Mantri Mudra Yojana (PMMY)
Purpose Collateral free loan upto Rs. 10 Lakh to MSE
Eligibility Micro and Small Enterprise, including small retail traders are eligible to be covered.
➢ Shishu: Upto Rs. 50000/-
Loan amount ➢ Kishor: Rs. 50001/- upto Rs. 5.00 Lakh
➢ Tarun: > Rs. 5.00 Lakh upto Rs. 10 Lakh
Facility CC / TL / Dropline OD
TL/Dropline OD: (Review every year)
< 5 Lakhs: 5 Years including Moratorium of 6 Months
Repayment 5 Lakhs to 10 Lakhs: 7 Years including Moratorium of 12 Months. (Moratorium of more than 6
months only to Manufacturing units.)
CC-On demand, Validity–12 month, Renew every year
➢ Shishu (Loan Amount upto Rs. 50000/-): Nil
Margin
➢ Kishore / Tarun (i.e. Rs. 50001/- to Rs. 10 lacs): 20%
Collateral Security Covered under Credit Guarantee Fund for Micro Units (CGFMU)
Inspection Half-Yearly
Interest rate Linked to EBLR (CRP @ 3%)
➢ Loan upto Rs. 5 Lakh (Shishu & Kishore): Nil
Proc. / Upfront fee
➢ Above Rs. 5 Lakh (Tarun): 0.50% of loan + GST
Stock statement Yearly as on 31st December every year
➢ PAN card is not compulsory to avail PMMY loans.
Others ➢ Life insurance is not required for loans under PMMY.
➢ Go / No-Go Criteria based on Experian Score Band for loans upto Rs. 10 lakh to be used.

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SME Smart Score

➢ 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
Eligibility
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).
➢ Minimum: >Rs. 10 Lakh
Loan amount
➢ Maximum: <Rs. 50 Lakh
Facility Dropline OD / CC / TL or Combination of these facilities (depending upon customer’s need)
➢ Working Capital- On demand, to be renewed every two year Subject to review every year.
Repayment
➢ TL / Dropline OD- 7 years including moratorium of maximum 6 months
Working Capital = 20%
Margin
Term Loan = 33%
Not to be insisted. To be covered under CGTMSE. If borrower not ready to bear CGTMSE
Collateral Security
premium, security need to obtained as per Bank’s norms.
Scoring model Minimum score of 60% qualify under the Scheme
➢ WC- 25% of annual projected turnover.
30% for units having 25% of its turnover through digital mode.
Assessment

➢ For Trading units: 15% of annual projected turnover

Stock Statement Monthly
Inspection Half Yearly for standard accounts. Monthly for SMA 0/1/2 accounts.
Other CRA is not required but CUE-Lite rating to be done for all accounts.
SME e-Smart Score under Contactless Lending Portal (CLP)
➢ The chief promoter / 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
Eligibility
each sub-head like Personal Details, Business Details, Collateral Details of our internal scoring
model.
Minimum > 10 Lakh
Loan amount Maximum = 100 Lakh
E-SMART SCORE-2 Limit: >Rs.100.00 lacs to Rs.500.00 lacs
Facility CC, TL
Linked with EBR (CMR score would be applicable for interest rate calculation for loans upto
Interest rate
Rs.100.00 Lakh)
Margin Working Capital: 20%; Term Loan: 33%
Working Capital = Repayable on demand.
Repayment
Term Loan= 7 years including moratorium not exceeding 6 months
Working capital: Hypothecation/Pledge of stocks, book debts and other current assets.
Primary Security Term Loan: Charge by way of hypothecation / pledge / mortgage of entire assets created out
of bank finance.
Stocks Statement Monthly
➢ Half yearly for standard accounts.
Inspection
➢ Monthly for SMA 0/1/2 accounts.
CC: Processing fee: 0.35% of the limit amount
Proc. / Upfront Fee
TL: Upfront fee: 1.10% of the limit amount
SME e-SMART scoring model on CLP (CMR based go/no go criteria would not be applicable for
Go/No Go Criteria
Go/No-Go exercise)

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➢ CUE rating & CRA Rating are waived.

➢ CMR report for loans upto Rs. 50.00 Lakh to be obtained from CIBIL as GO/NO-GO criteria for all MSME loans.
➢ Takeover-Not Applicable.
➢ ERS-SL will be applicable for loans above Rs. 50 Lakh to Rs. 100 Lakh.
➢ For annualizing current year sale, GST sale of minimum 3 months will be required. In case GST data is not available
projected turnover 115% of last year GST sale will be taken.
➢ Decision: All the cases to be either sanctioned / rejected within 7days from the date of in-principle sanction.
➢ The branch / CPC to complete the renewal exercise with 7days of generation of in-principle sanction.
➢ Our Bank specified URL for CLP is
Finance under Multiple Banking Arrangement not permitted Bank Specific URL for data entry:
www.psbloansin59minutes.com/sbi Market URL for data entry : www.psbloansin59minutes.com/sbi.
A) The rejection reason should be approved by GM (Network) before marking of rejection in CLP portal and the
rejection letter (to be provided to the customer) should be signed by:
i. BPR Centre Limit up to Rs.50.00 lacs: CPC Head
ii. BPR Centre Limit above Rs.50.00lacs: Regional Manager
iii. Non- BPR Centre: Regional Manager
B) Finance under multiple banking arrangement should not be permitted
Stand Up India (SUI)
To meet all kinds of credit requirement for setting up Greenfield Projects under
Purpose
manufacturing, services or the trading sector.
Eligibility SC / ST / Women Borrower
➢ Minimum: > 10 Lakh
Loan amount
➢ Maximum: 1 Crore
Facility Composite Loan (WC / TL)
Repayment 7 years including moratorium period upto 18 months
Minimum mandatory margin is 10%.
Margin Maximum Margin Money on composite loan would be upto 25% which will be reduced
through convergence with Central / State Schemes.
Covered under Credit Guarantee Fund Scheme for Stand Up India Loans (CGFSIL) (Other Name-
Collateral Security
CGSSI)
➢ Quarterly (Standard Accounts)
Inspection
➢ Monthly (SMA Accounts)
Stock Statement Monthly
Interest rate 1 Year MCLR + 3%
0.20% of Loan amount as unified charges (i.e. including Processing fee / upfront fee /
Proc. / Upfront fee
Inspection fee etc.)
CC Limits – 2% p.a. on entire outstanding for the period of irregularity.
Penal Interest
Term Loans – 2% p.a. on irregular portion for the period of irregularity.
➢ In case of Non-individual enterprise, minimum 51% shareholdings should be held by SC /ST / Women.
➢ RuPay Card to be issued for Cash Credit Component
➢ The scheme, which covers all branches of Scheduled Commercial Banks, can be accessed in three potential ways:
(a) Directly at the branch
(b) Through SIDBI’s interactive Stand up India portal called www.standupmitra.in (accessible at home / branch /
through LDM / Common Service Centres (CSCs)).
Asset Back Loan Schemes: ABL , ABL CRE-CP AND ABL - RH
Asset Backed Loan (ABL) ABL CRE-CP ABL - RH

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All Business Units who want

to avail loan facility for
manufacturing and services
Target group Proprietorship/ Partnership/ Company
activities covered by MSMED
act 2006, wholesale/retail
trade
Creation/acquisition of real estate
For build-up of current assets
such as office buildings, retail space,
and fixed assets needed for
industrial or warehouse space,
business purpose, capacity Creation / Acquisition
multiplex, hotels, restaurants,
Purpose expansion, modernization, of Residential Real
gymnasium, amusement parks, cold
short term working capital Estate
storage etc. where the prospect for
(including shoring up of Net
repayment would generally be lease
Working Capital, etc).
or rental payment or sale of asset.
➢ Existing Customer already availing credit facilities from us.
Eligibility ➢ New units with marketable assets to offer as security.
➢ Takeover of existing units from other Banks/ FIs with satisfactory track record.
Facility Fund based (Drop-line OD or CC), NFB TL
60% of the realizable
60% of the realizable value 50% of the realizable value of
LTV value of immovable
of immovable property immovable property
property
➢ Minimum: Rs 10 Lakh
➢ Maximum:
Min: >Rs. 10 Lakh Min: Rs. 50 Lakh.
Loan amount Metro & Urban Centres: Rs. 50 Cr
Max: Rs. 20 Cr Max: Rs. 100 Cr
Semi-Urban Centres: Rs. 20 Cr
Rural Centres: Nil
12 Months to 72 Months. If the
12 months to 240 months
repayment is coming from rental 12 months to 84
Repayment (i.e. 1 to 20 years).
income, based on cash flows the loan months
Cash Credit: On demand
can be sanctioned upto 120 months
Min. 25% cash margin for 25% both for working capital and
Margin 25%
Non Fund Based facility fixed assets
No renewal of limit.
Drop line OD: No renewal of limit. Review has to be carried out
Review has to be
annually Restitution of limit is allowed/fresh sanction under ABL.
carried out annually
Renewal / Review Cash Credit (Under ABL only): To be renewed once in two years with
and Restitution
yearly review for all satisfactorily conducted accounts which are not
/enhancement in limits
in SMA category during the last 12 months.
not permitted
Quarterly Operational Data Cash flow statement
Cash Flow statement for Builder
Stock Statement / cum status of working capital on Quarterly basis.
Finance on Quarterly basis in the
Cash Flow funds statement on Quarterly (May / Aug / Nov /
month May/ Aug/Nov/Feb.
basis. (May/Aug/Nov/Feb) Feb).
➢ Credit Information Reports from CICs/CIBIL Report should be satisfactory and
Credit Opinion Report from other Banks to be obtained.
Takeover Criteria
RBI defaulter list and CRILC should be verified.
Takeover of loans from our associates / subsidiaries companies are not permitted.

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NPAs / SMA should not be taken over

i-Probe should also be verified.
Bank statements of all accounts of the constituent with other banks for last 12 months are to
be mandatory obtained and perused.
Bank’s other takeover norms will not be applicable under this scheme.
➢ Creation of security: Simultaneously on taking over the loan outstanding from the other
Bank and Perfection of security – within 30 days from the date of first disbursement of the
loan.
Collateral: ➢ Immovable property (SARFAESI enabled)
➢ Third party Guarantee: Personal Guarantee from the Promoters / Partners / Directors of the
Security
Unit.
➢ Personal Guarantee of the owner of the Collateral Security offered for Mortgage.
Monthly till completion of the
Half-yearly (Only digital project & thereafter half yearly.
Inspection inspection application to be FSMTL reports are to be compiled till Quarterly
used) the project completion.
SMA 1, 2 = monthly till upgradation.
Penal interest 2% of outstanding amount, if overdue by >7 days
1% of the limit &
Upper cap is as under:
Rs.10 lakhs for loan
up to Rs. 50 crores.
Processing Fee 1% of the loan limit Max: Rs. 10 Lakh
Rs. 20 lakhs for loan
more than Rs. 50
crores and up to
Rs.100 crores.
Loan up to 5 Cr: = Rs. 15000/- &
EM Fee
> Rs. 5 Cr: = Rs. 25 per Lakh (Min: Rs. 25000/- Max: Rs. 40000/-)
Inspection Charges Limits upto Rs.1 Cr: Rs.1000/- & Limits above Rs.1 Cr: Rs. 3000/- per inspection
Hurdle & CRA
Unit with CRA of SB-10 and below is not eligible for finance.
Rating
mandatory for
sanction of limits
ECR Not Mandatory above Rs.100 Crores
but will not be a factor
for pricing
Commitment
Nil (more than 75% utilization): 0.50% (50% to 75% utilization): 1% (for <50% utilization)
Charges
➢ TIR should be obtained from two different panel advocates in case of loan is above Rs. 25
Lakh.
➢ Property mortgaged needs to be within a radius of 25 km from the Branch, wherein account
is maintained (sanctioning authority may decide going beyond 25 km on case to case basis)
Others Conditions
➢ If the credit summations in the account are less than 65% of sales realization, penal interest
@ 0.25% will be charged till next review of the limits.
➢ Existing term loan or cash credit can be converted into ABL subject to CRA of the unit is SB-5
or better and conduct of account is fully satisfactory.

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➢ Free cash pick up facility for limits above Rs. 10 Crore (maximum free pick up in a year up to
extent of 25% of the limits.
➢ Borrower will be given SME Insta Deposit Card and SBI Business Debit Card free of cost.
➢ Valuation of property every 3 years and any shortfall has to be topped up.
➢ Property with Power of Attorney not permitted.
➢ Agricultural land should not be considered as property for mortgage.
➢ SEZ property not to be taken.
➢ Open Land outside urban limits should not be considered.
➢ No Second Charge or Pari-Passu charge will be extended for other Bank/FI.
➢ No overdrawing to be permitted.
➢ DP reduction date or installment due date may be last working day of every month.
➢ In case of no credits in a calendar month, the Borrower will be contacted immediately.
Electronic Dealer Finance Scheme (e-DFS)
To provide hassle free finance to authorized Dealers/Stockiest/Distributors/Franchisees of
Purpose
Industry Majors (IMs) for purchase of Inventory
Facility Cash Credit
Dealers/Stockiest/Distributors/Franchisees of Industry Majors having tie-up arrangement with
Eligibility
the Bank
Loan Amount Need Based and Tie-up Specific
EBLR/ One year MCLR + 0.55% to 3.00% depending on each tie-up and security coverage
(Interest Rate not Linked to CRA Rating/Financials of Unit. Interest on Daily Reducing Balance
Interest Rate for each consignment).
Interest Rate for MSME units will be linked to EBLR and for non-MSME units will be linked to
One year MCLR.
Margin Nil. 100% Finance. In case of Jewellery tie ups it is 25%
➢ The dealer has to make repayment within the agreed credit period.
Repayment ➢ In case the dealer fails to repay within the grace period, no further drawings will be allowed
from his electronic dealer financing account.
Nil / Or up to 50% depending on each tie-up (Loans can be covered under Mudra, Stand Up
Collateral Security
India, CGTMSE as per guidelines for respective tie-ups)
Stock Statement Monthly
Monthly. However, immediate inspection to be carried out on account becoming inactive and
Inspection
monthly till account becomes active.
➢ The Bank has formed two verticals, namely Supply Chain Finance Unit (SCFU) under SME BU, Corporate Centre
and Transaction Banking Unit (TBU) under Corporate Banking Group, Corporate Centre to focus on financing the
supply chain of the Corporates.
➢ In case dealer does not deposit invoice- wise sales in the e-DFS account it may be treated as diversion of funds and
penal interest of 0.50% p.a. will be charged to the e-DFS account”.
➢ Limits up to Rs.1 crore, can be covered under CGTMSE.
➢ CGM of Circles/ CCG will have the discretion to offer (in case of individual dealer accounts, on case to case basis), a
finer rate of interest up to 35 B.P., over the applicable rate for the tie up.
➢ Stock & Receivable audit (SAR) has to be conducted mandatorily upon completion of 30 days of inactiveness of
the account, for all loans above Rs. 10 Cr. Periodicity- Yearly
SME Open Term Loan
i. All units under Manufacturing sector and;
Target Group
ii. Under Service sector: Healthcare Industry (Hospital, Doctors, Pathological Labs, and Nursing

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Home), Hospitality Industry (Hotels, Restaurants, etc ), and Transport Operators with minimum
25 vehicles
➢ The product will be extended upto CRA rating of SB-6 / CUE-6 or ECR of BBB and above.
➢ Existing customers having banking with us for more than 5 years and having satisfactory
track record i.e. the account has not slipped to category SMA-1 and below in the previous 12
Eligibility months (irregular for 31 to 60 days) will also be eligible for finance under Open Term Loan
subjected to:
(a) CRA rating of SB-8/CUE-8 & above, or
(b) ECR of BB & above
Both manufacturing and services enterprises: 25% of total limit sanctioned with a minimum of
Rs 25.00 lakhs and maximum of Rs. 10 crores (For expansion, modernization, technology
Loan amount
upgradation:- For the purpose of creation of tangible assets only) Not envisaged for business
development expenditure and for creation of intangible assets.
Facility TL
Repayment Maximum – 8 years including a moratorium period (maximum moratorium 12 months)
Margin 25%
For new customers: CRA rating of SB-6 / CUE-6 or ECR of BBB and above.
CRA Rating
For existing customers: CRA rating of SB-8/CUE-8 & above/ECR of BB & above Loan Amount
DSCR 1.75
Auhtorised Branches SME/MSME intensive branches and Branches equipped with RM (SME)
The limits are to be utilized within 12 months of sanction. If the limits are not utilized or only partially utilized within
12 months of sanction the limit or unutilized portion of the limit as the case may be, will lapse and should not therefore
be disbursed.
SME Marble Plus
➢ Existing and new units with credit rating SB-9 /CUE-9 and better.
Eligibility ➢ Takeover of good units- Hurdle Rate for takeover of the account will be SB-7/ CUE-7
subject to adherence of take over norms as per Bank’s Loan Policy.
➢ Minimum: >Rs. 10 Lakh
Loan amount
➢ Maximum: Rs. 10 Cr.
➢ Cash Credit / Term Loan / Dropline Overdraft
Facility
➢ Non Fund Based Limits (LC/BG)
➢ Term Loan / Dropline OD – Max. 120 months (Inclusive moratorium 12 Months)
Repayment
➢ Working Capital: Sanction valid for 12 Months (Annually Renewal)
➢ Working Capital: Stocks: 25%; Receivables: 40%
Margin ➢ Term Loan: 25%
➢ LC & BG: Min. 25% Cash Margin
Stock statement Monthly
➢ Minimum 50% of loan amount. (Security must be SARFAESI Compliance).
➢ No Second Charge or Pari-Passu charge will be extended to other Bank/FI
Collateral Security
➢ Eligible units may be covered under CGTMSE as per CGTMSE guidelines (Trading units: up to
Rs. 1 Cr; Services & Mfg units: up to Rs. 2 Cr). Customer has to bear the Guarantee Fee.
Loans up to Rs. 5 Cr: (Working Capital for MSME units)
➢ Minimum 25% of the annual projected turnover
Assessment of loan ➢ Minimum 30% of the annual turnover for units with min. 25% of sales registered through
digital transaction

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For Trading Units: Minimum 15% of the annual projected turnover

Loans above Rs. 5 Cr to Rs. 10 Cr: (Working Capital) As per Assessed Bank Finance (ABF)

Term Loan: 75% of project cost for all loans

➢ Quarterly (For Standard Account) &
Inspection
➢ Monthly for SMA1/ SMA 2 accounts, till the account turns regular.
➢ New Connections/ Enhancement: SB-9 /CUE-9
CRA/CUE Hurdle
➢ Takeover: SB-7/ CUE-7
DSCR >=1.50
Proc. / Upfront fee Unified Charges: 1% of Loan Amount (Min- Rs. 10000 & Max- Rs. 50000 + GST)
Healthcare Business Loan
➢ Individuals/ Proprietorship Firms/ Partnership Firms/ Corporates/ Trusts (with powers to
borrow)
➢ Applicant should have minimum 2 years of operations of the diagnostic Centre, pathological
lab, hospital, nursing home, etc. irrespective of constitution.
➢ In case of financing to Hospitals/ Nursing Homes, the promoter should have required
Eligibility Criteria minimum qualification in the relevant discipline; like MBBS, BDS, BHMS etc.
➢ Should have the required approvals/ registrations from the statutory/ regulatory authority.
➢ ITR is mandatory in case of all existing units operating for more than one Financial Year.
Deviation Approving Authority:
➢ In case of sanctions by CLCC and below, GM (Network) will have the discretion to approve
deviations in the eligibility criteria.
Nature of Facility Term Loan and/or Cash Credit
Minimum: > Rs. 10 Lakh
Maximum: Up to Rs. 20 Crores
Quantum of loan
Cash Credit facility shall be given for maximum limit of Rs. 2 Cr only, for meeting recurring
expenses.
Term Loan - 15%
Margin
Cash Credit - 25%
CRA/ CUE Hurdle SB/ CUE- 9. No deviation is to be permitted in this respect.
For loans to MSME units, Interest rate will be linked to External Benchmark Based Lending Rate
Pricing (EBLR).
For loans to Non-MSME units, Interest rate will be linked to One Year MCLR.
Primary: Hypothecation/mortgage of the assets financed by the Bank.
Collateral:
Loans up to Rs. 2 Cr: Nil, if covered under CGTMSE/CGSSI. Guarantee Fee to be borne by
borrower.
For coverage under CGTMSE, partial collateral security model is also applicable as per extant
CGTMSE guidelines.
Security
However, If the borrower is not willing to pay the guarantee fee or not willing to cover the
exposure under CGTMSE/CGSSI, then minimum 25% SARFAESI enabled collateral security
needs to be obtained.
Loans above Rs. 2 Cr to Rs. 20 Cr: Minimum 25% SARFAESI enabled tangible collateral
security.
Discretion: CGM of the Circle will have discretion to reduce collateral security coverage up

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to 15% on a case to case basis on business considerations.

Cash Credit: Yearly Renewal. Repayable on demand.
Term Loan: 10 years including moratorium
Repayment Period ➢ Max moratorium 12 months (6 months in case of purchase of equipment only).
➢ Annual Review to be done
➢ Interest to be serviced on a monthly basis during the moratorium period
Penal Interest 5% p.a. over & above the existing rate of interest on overdue amount for the period of default
Half yearly for regular accounts and monthly for accounts in SMA category till account turns
Inspection regular.
For collateral security, inspection to be done on yearly basis at the time of review
➢ Cash flow generated out of the equipment financed under the product should mandatorily be routed through our
Bank account maintained at the Branch.
➢ The borrower may be encouraged to route its transactions through PoS machine, other digital platforms of SBI etc.
➢ PoS machines should be mandatorily installed to efficiently capture all the cash flows for CC facility, in respect of
card transactions.
➢ Opening of Current Account with other Banks shall be restricted.
SME Assist
A Short Term Working Capital Demand Loan (WCDL) facility to be sanctioned outside Assessed
Purpose
Bank Finance (ABF)
i) CRA rating SB-10/CUE-10 and better.
Eligibility ii) Account should be standard.
iii) Satisfactory conduct of the account
Maximum 20% of the existing fund based working capital limit or
Loan amount
80% of Input tax claim due on purchases, whichever is lower.
Facility Working Capital Demand Loan (WCDL)
Moratorium 3 months
a) 3 months (one bullet repayment immediately after moratorium) OR
b) total 12 months (moratorium of 3 months, repayment in remaining 9 monthly
instalments)
Repayment
➢ Interest to be serviced every month.
➢ Drawing power to reduce in line with equated monthly instalments every month after
moratorium period is over.
Primary: Hypothecation of stocks and receivables.
Security
Collateral = Nil
➢ Upto Rs 50 lakhs- Rs 5000 (flat)
Proc. Fee
➢ Above Rs 50 lakhs- Rs 10,000 (flat)
➢ Documentation: SME 1 (letter of arrangement) and SME 4 (Supplemental agreement of Loan cum Hypothecation).
➢ Invoices under Letter of Undertaking (LoU) in case of exports will not be eligible under the product
➢ Not more than 2 loans under the product shall be outstanding at a given point of time
SME Car Loan
All MSME/ Non-MSME units, having borrowing arrangements with us, are eligible under the
Eligibility
product, subject to account not being in SMA 1 & worse category during last 12 months.
10% of existing sanctioned limit (FB + NFB); Maximum = 3 Crore
Loan Amount
Max. amt. of each car loan capped at Rs.1 crores with overall limit of Rs. 3 crores
Repayment 07 Years

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Facility TL
Loans up to Rs. 10 Lakh = 15% of the on-road price of the car
Loan > Rs. 10 Lakh to Rs. 3 Cr:
Margin a) 15% margin on Ex-Showroom price of the car Or
b) Margin of 20% on the On-Road Price of the car, at the option of the customer
(Sanctioning authority will have discretion to reduce the margin by 5%)
Security Primary = Hypothecation of Vehicle, Collateral = Nil
If Sanctioned = 0.50% of Loan (Min-500, Max-10000 + GST)
Processing Fee
If Rejected after PSS = 25% of applicable processing fee (Min-500, Max-2500 + GST)
➢ For Standard Asset : Waived after the initial inspection.
➢ Immediately 30 days after initial default.
Inspection
➢ NPA accounts: Quarterly.
➢ Inspection register is to be maintained properly
Comprehensively insured in the name of the borrower for the market value or at least 10%
Insurance above the loan amount outstanding, whichever is higher. The Bank’s interest as a hypothecatee
should be noted in the certificate of insurance and insurance policy.
Interest Rate 03 Years MCLR + 0.75% (Fixed) with minimum effective Rate of Interest being 9.00%
Penal Interest 5% p.a. over and above the applicable ROI on overdue amount for period of default
2% of the prepaid amount in below cases:
➢ The loan is taken over by any other Bank/FI, or
➢ The loan is repaid before expiry of half of the agreed repayment period, or
Pre-payment penalty ➢ Partial repayment is being made in the 1st year
However, no pre-payment charges in below cases:
➢ If the loan account is foreclosed for taking a fresh car loan for new car from Bank.
➢ If borrower is MSE Borrower as per commitment to BCSBI.
➢ There is no cap on number of vehicles to be financed, as long as the above criteria is met.
➢ Vehicle should be registered in the name of unit only.
Other
➢ For recovery/ seizure of vehicles, extant instructions issued by PBBU, from time to time, shall
be followed.
SME Finance for CAs Under CLP
Member Chartered Accountants (CAs) / Proprietorship / Partnership / or in any other form
Target Group
registered with the Institute of Chartered Accountants of India and currently under practice
➢ Minimum Age: 25 Years, Maximum Age: 65 years
➢ CA must have Certificate of Membership (CoM)/ Certificate of Practice (CoP) issued by ICAI.
CoM/ CoP should be at least 5 years old.
Eligibility ➢ Last 3 years ITRs should be available.
➢ The applicant must obtain a minimum score of 50% as per score card under the scheme..
➢ Applicant must be registered in UDYAM portal as MSME.
➢ Applicants with CIBIL score below 650 will be ineligible
Minimum: Rs. 2.00 Lakhs
Maximum:
Loan Amount Overdraft = Rs. 25 Lakhs
Term Loan: (i) Metros: Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Bengaluru: Rs. 100 Lakhs
(ii) Other Centres (State Capital/ Tier-I cities): Max. Rs.75 Lakhs.
Facility Overdraft and Term Loan
Repayment Overdraft: Payable on Demand; Term Loan: 5 Years (Inclusive of moratorium of 12 months)

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Margin Overdraft: Nil, Term Loan: 25%,

Assessment Term Loan: 75% of the project cost.
of Loan Overdraft: 25% of Gross Receipts of the Firm/ CA (Max- Rs. 25 Lakhs)
Collateral Overdraft: Nil, Term Loan: Covered under CGTMSE. (Fee will be borne by borrower)
DSCR Minimum 1.50
AAROGYAM Healthcare Business Loan
Quantum of loan Min- Rs. 10.00 Lakhs; Max- Need Based Subject to Exposure norms .
Repayment Cash Credit: Renewal Every Year. Term Loan: 10 Years
➢ For construction of Hospital/Nursing Home/Clinic = 18 Months
Moratorium ➢ In case of purchase of equipment only = 6 months
➢ For Brownfield (Expansion/Modernization/Renovation) project = 6-12 months
Facility Cash Credit, Term Loan, Bank Guarantee, Letter of Credit (Import/Domestic).
➢ Term Loan = 25%
Margin ➢ Cash Credit = 25% (Stocks), Receivables: 40%, Cover Period- 90 Days
➢ LC / BG= 25%
CRA Hurdle SB-10 / CUE-10. ECR to be obtained for all loans above Rs.50 Crs.
Primary Security Hypothecation/ mortgage of assets financed by the Bank.
➢ Loan Up to Rs. 2 Cr. = If covered under CGTMSE: Nil, otherwise 25% SARFAESI enabled
collateral security.
Collateral Security
➢ Loan >Rs. 2.00 Cr. = Units with ECR rating of BBB (+/- included) & better: NIL Collateral.
➢ Loan >Rs. 2.00 Cr. = For Others = 25% SARFAESI Compliant Tangible Security
➢ MSMEs must be registered in Udyam portal and should possess Udyam Registration
Certificate.
➢ Average Gross DSCR of 1.50 in case of TL.
Others
➢ FACR >1.25 and Interest Coverage Ratio: > 2
➢ PoS machines should be mandatorily installed to efficiently capture the cash flows, in respect
of card transactions in case of Sole Banking.
AAROGYAM (Non-Metro) Healthcare Business Loan
Minimum: No minimum.
Quantum of loan
Maximum: Rs. 100 Crores for all centres other than metro cities
Cash Credit: To be renewed yearly. Repayable on demand.
Repayment
Term Loan: Maximum period of 10 years including moratorium period.
➢ For construction of Hospital/Nursing Home/Clinic = 18 Months
Moratorium ➢ In case of purchase of equipment only = 6 months
➢ For Brownfield (Expansion) project = 6-12 months
➢ For Brownfield projects: Up to 2 years from the Date of Commencement of Commercial
Guarantee coverage Operations (DCCO), subject to maximum period of 5 years from the date of first disbursement.
➢ For Greenfield projects: Up to 5 years from the date of first disbursement.
Nature of Facility Cash Credit, Term Loan, Bank Guarantee, Letter of Credit (Import/Domestic).
Project Debt: Equity: 3 :1
➢ Term Loan - 25%
Margin
➢ Cash Credit - 25% (Stocks), Receivables: 40% Cover period: 90 days.
➢ BG/LC – 25%
CRA/ CUE Hurdle SB-10/ CUE – 10. ECR to be obtained for all loans above Rs. 50 Crs.
Primary Security Hypothecation/ mortgage of assets financed by the Bank.
Collateral Security If Greenfield Projects: Nil.

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If Brownfield Projects:
➢ In case of Equipment Finance: Nil.
➢ Others: Extension of charge over existing securities including land & building, plant &
machinery, if available.
➢ In case of individual borrower & MSE borrower: Nil
➢ For others:
Pre-Payment Penalty
In case of pre-payment through internal accrual/own fund: Nil
In all other cases: 2.00% p.a. of the prepaid amount
Penal Interest 5% p.a. over & above the existing rate of interest on overdue amount for the period of default
Half yearly Inspection for regular accounts and monthly for accounts in SMA category till
Inspection account turns regular.
For collateral security, inspection to be done on yearly basis at the time of review.
➢ MSMEs must be registered in Udyam portal and should possess Udyam Registration
Certificate.
➢ Average Gross DSCR of 1.50 in case of TL.
Other
➢ FACR >1.25 and Interest Coverage Ratio: > 2
➢ PoS machines should be mandatorily installed to efficiently capture the cash flows, in respect
of card transactions in case of Sole Banking.
PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi)
Validity of Scheme 31.03.2022
Facility Type Fund Based Working Capital (Demand Loan)
Eligibility all street vendors engaged in vending in urban areas as on or before March 24, 2020.
Loan Amount Min-15000, Max-20000
Disbursement Single tranche
Repayment Min-12 Months, Max-18 Months
Margin Nil
Interest Rate EBLR 6.65 + 3.35% = 9.90%
Interest Subsidy 7%
Security Nil
Processing fee Nil
Others Promotion of Digital Transactions by Vendors
SME Gold Loan
Existing MSME Units (Proprietorship Firm only), both borrowing & non-borrowing units of
Target Group & our Bank, who want to avail loan against Gold Ornaments/ Jewellery.
Eligibility ➢ Unit/ Shop shall be with running activity
➢ Account should not be in NPA status
Nature of Facility Overdraft (OD) / Demand Loan (DL)
➢ Minimum: > Rs. 1 Lakh
➢ Maximum: Rs. 50 Lakh
Quantum of loan (i) 25% of the Projected Turnover of the unit,
(ii) 100% of value of asset proposed to be purchased for business purpose
(iii) 100% of the Advance Value of Gold
Repayment Period 12 months
LTV 75%
Primary Security Pledge of Gold Ornaments/ Jewellery in favour of the Bank
Collateral Security Nil

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➢ Up to Rs. 10 Lakh: Rs. 500 plus applicable taxes

Processing Fee
➢ Above Rs. 10 Lakh: Rs. 1000 plus applicable taxes
Pre-Payment Penalty
Nil
/Inspection Charges
5% p.a. over and above the existing rate of interest on overdue amount for the period of
Penal Interest
default.
Interest Rate EBR + 0.60
Inspection Waived
➢ In case interest is not serviced for two months, auction notice to be sent mentioning the probable date of auction,
once account turns to SMA 2. - If no reply is received within 15 days from borrower, gold to be auctioned before
account turns to NPA status.
➢ Gold loan accounts with limits Rs. 5 lacs and above should be appraised by two appraisers. For Gold Loan accounts
with limits below Rs. 5 lacs, second approved gold loan appraiser be engaged to carry out the purity verification, on a
random basis, for at least 10% of the loans sanctioned during the month”
Lease Rental Discounting (LRD) Scheme
i. All SME intensive branches to handle proposals up to the cut off for NBG i.e., up to Rs. 50 Cr
Authorised branches ii. Other NBG branches approved by CMC of the Circle may handle proposals up to Rs.10 Cr.
iii. All CCG/CAG Branches
Location of Property SARFAESI compliant properties located in Metro / Urban / Semi- Urban centers only
Minimum Minimum
R & DB Branches Rs 10 Lakh Rs 50 Cr
Loan amount CCG/CAG Branches* Rs 50 Cr Rs 1200 Cr
*For- CCG & CAG Branches i. ECR rating ‘A (+/-)’ or better – For Builders (lessor). If Builders
Rating is not available, Sponsor’s Rating to be considered. In such case, Max Loan=Rs. 2000 Cr
Facility TL
i. Upto Rs.50 cores: Maximum 10 years or residual lease period and the lease period under
renewal clause, whichever is lower.
However, in case of tenants being large MNCs/ Banks/ PSUs /Govt. Depts., Maximum 15 years,
Repayment
or residual lease period considered for assessment of loan, whichever is less.
ii. Above Rs. 50 crores: Maximum 15 years, or residual lease period and the lease period
under renewal clause, whichever is lower
Collateral Security The realizable value of property to be mortgaged should be at least 143% of the loan amount
DSCR 1.25
i. Minimum 3 months EMI should be kept with the branch as Debt Service Reserve Account
(DSRA). In case of consortium/ MBA where ESCROW is maintained with other members,
DSRA stipulated DSRA to be maintained with us.
ii. Higher DSRA up to 6 months may be stipulated by Sanctioning Authority, on a case to
case basis.
Pre-payment Penalty 1% of the prepaid Loan amount
➢ Half-yearly.
Inspection
➢ Monthly if default with one EMI
Annual.
Review
Annual Review charges are not applicable
To be carried out in respect of accounts where there is a shortfall of more than 20% in rent
Dynamic Review
realization during the previous 3 consecutive months.
Top-Up Loan ➢ Existing Borrowers where the original loan has run for a minimum period of 03 Years.

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➢ The residual lease period in all cases should not be less than 2 years.
➢ In case of Takeover of loans, timeline up to maximum 3 months may be permitted by the Sanctioning Authority on a
case to case basis for creation of mortgage
Standby Line of Credit for MSME
➢ Existing Units having Limits upto Rs. 5 Cr only are eligible.
Eligibility ➢ All Units irrespective of Rating (ECR/CRA/CUE)
➢ Account to be standard. SMA-0 and SMA-1 accounts are also eligible under the Scheme
Loan Amount 25% of the existing working capital limit (FBWC + NFBWC). Max Rs. 1.25 Cr
Facility DL (Only Fund Based)
The borrower can avail the sanctioned amount in one go or in tranches. The entire loan under
Disbursement &
the scheme have to repaid within the max period of 12 months from the date of disbursal or
Repayment
validity of sanction whichever is earlier.
Cover Period Up to 9 months of receivables to be considered
Margin Nil
Processing Fee Nil
Interest Rates 0.50% above sanctioned Cash Credit
Sanctioning
Branch Head not below the rank of Chief Manager
Authority
Hypothecation of stocks and receivables. Extension of charge on the Primary Security /
Security
Collateral security
SME Credit Card
Customers of the target group segments with a satisfactory track record for the last 2 years.
➢ Units who do not enjoy credit limit with us / other banks at present with excellent
Eligibility performance and credentials may be considered.
➢ Term loans can be sanctioned under SBCC for acquisition of shop under Small Business
Enterprises.
Loan amount Max: 10 Lakh
Facility CC or TL
➢ For SSI: NIL (Covered under CGMFU)
Margin ➢ For SBF: upto Rs. 25000/- : Nil
➢ Above Rs. 25000/-= 20%
Repayment Term Loan: Max. 5 years, Working Capital Limit: Valid for 3 Yr with annual review
Stock Statement Annually on 28th February
Inspection Quarterly
Scoring model Minimum score of 60% qualify under the Scheme
➢ For small business, retail traders: 20% of their annual turnover OR 20% of turnover of the last
12 months in their accounts, whichever is higher.
Assessment ➢ For self-employed & professionals: 50% of gross annual income as declared in their income
tax return
➢ For SSI units: As per Nayak Committee norms ie. 20% of annual turnover.
➢ Primary : : Hypothecation of stock in trade, receivables, machinery, office equipment
➢ Collateral
Security (a) For SSI: NIL (Covered under CGMFU)
(b) For SBF: upto Rs. 25000/- : Nil
(c) Above Rs. 25000/-, charge over movable /immovable property/TPG

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General Credit Card Scheme

Loan amount Maximum 5 Lakh
Facility Cash Credit / Term Loan
Repayment CC- Renewal in 3 years (Validity- 3 years); TL repayment – 5 years
Assessment of loan is to be done as per SME Credit Card Scheme as detailed hereunder:
Assessment of Limit For professional and self employed: 50% of gross income shown in IT returns.
For SSI / Traders etc.: 20% of Projected Annual Turnover
Margin 20%
Renewal of Limit The working capital limit will be valid for 3 years subject to annual review
Primary = Hypothecation of stock in trade, receivables, machinery, office equipment etc.
Security Collateral = As per extant instructions for SME loans (For Manufacturing & Service Sector – No
collateral is to be obtained if otherwise eligible for cover under CGTMSE)
Proc. Fee Up to Rs.5 Lakh – Nil
➢ GCC, preferably, will be issued as a Smart Card / Debit Card viz. Biometric Smart Card compatible for use in the ATMs
/ Hand held Swipe Machines and capable of storing adequate information on entrepreneur’s identity, assets and credit
profile etc.
➢ Pass book containing the name, address, photograph of the holder, particulars of borrowing limit, validity period etc.
may be issued. The pass book will serve both as an identity card as well as facilitate recording of the transactions on an
ongoing basis.
Artisan Credit Card
➢ Artisans in the handicrafts sector and not covered by the government sponsored loan
schemes.
Eligibility ➢ Minimum score of 60% under the simplified scoring model.
➢ Existing borrowers with limits up to Rs.2 lacs and satisfactory track record are also eligible.
➢ New units are also eligible.
Loan amount Max: 2 Lakh
Facility CC
Repayment CC- Renewal in 3 years (Validity- 3 years)
➢ Upto 25000/- = NIL
Margin
➢ Over 25000/- and upto Rs.2 Lakh = 20%
Collateral Nil
➢ 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.
➢ Assessment to be made under Nayak Committee norms and will be based on the simplified Scoring Model.
PABL (Pre-Approved Business Loan)
Target Group C/A customers (Sole Proprietorship) classified as “Micro” as per revised definition of MSME
To provide hassle free finance to our existing C/A customers for meeting their multiple
Purpose of loan
requirements related to their business activity.
➢ Leads generated by Analytics Department.
Eligibility
➢ Yono Business / CINB/RINB facility is enabled.
Type of facility Dropline Overdraft
Min.: >Rs.50,000;
Quantum of Loan
Max.: Rs. 10 Lakh
Repayment 60 Months
Inspection ➢ Periodic Inspection is to be waived for regular accounts

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➢ A unit is to be inspected monthly for SMA/NPA accounts till regularization or till migration of
the account to SMEC/RACC/RASMEC whichever is earlier.
Processing Fee 0.30% of limit + applicable GST
Prepayment penalty Nil
Inspection charge Nil
Rate of Interest EBLR+5% p.a., present effective rate 11.65% p.a.
Security Nil
Banking
Sole Banking
arrangement
➢ Experian Commercial Scrub: Cases where DPD is more than 29 days in the last 24 months
removed.
➢ Accounts having any record of delinquency in other banks in any tradeline in the last 36
CIC Scrub months excluded
➢ GO / NO GO criteria for loan upto Rs.10 Lakh (Experian Score Band) is used.
➢ In case of loan amount upto Rs. 10 Lakh, one CIC report (CIBIL only) is fetched and CIBIL
score for all promoters / partners should be >650, 4, 5, -1 or No history.
Display of Loan offer
1st -20th of a month
on INB Channel
Validity of Accepted
10 days from offer acceptance date.
loan offer in LLMS
Arthias Plus Scheme
Commission Agents/ Arthias (functioning in markets/ mandies) also engaged in Retail trade
activities and enjoying good reputation in the market with sufficient experience in the line of
Eligibility
their business for the past 3 years. They should be registered with the Market Committee and
possess a valid license issued by the Authorized government agencies.
Minimum: >10 Lakh
Loan amount
Maximum: 5 Cr
Facility CC
Repayment One Year. To be renewed annually as per norms
➢ Stocks: 30%;
Margin
➢ Receivables: 40% (Not more than 6 months old)
125% of loan amount for all category of loans (Only SARFAESI Compliance). Collateral security
must be tangible (Non- agricultural property) belonging to the borrower or guarantor. Third
Collateral Security
Party collateral from close relative is also acceptable. All properties required to be registered
with CERSAI.
Stocks Statement Monthly
➢ Quarterly - Primary Security.
Inspection
➢ Yearly inspection of property mortgaged (if any)
➢ Two Credit information reports from separate CICs.
CIR
➢ CIBIL Score – 650 for New unit. For existing unit, score <650 deviation by GM (NW).
(i) Where Sales are booked by Arthias: Limit would be assessed 20% of the projected sales
Assessment of Limit (ii) For Commission Income: Limit would be assessed as 20% of Sales.
Final limit to be arrived by adding both the limits at (i)+(ii).
➢ Charges: 1% of limit sanctioned p.a (Min, 10000/-, Max=50000/- plus taxes.
➢ Commitment charge waived.
➢ Penalty of 1% shall be levied at the time of next renewal if the borrower fails to route 100% realizations through Cash

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Credit accounts.
Weaver Credit Card PMMY Scheme
Loan Composite Loan – Max upto Rs. 2 lacs with minimum Rs. 50,000/-
Facility CC & TL
Repayment CC- Renewal in 3 years (Validity- 3 years) subject to annual review; TL repayment – 3 years
Margin 10% of the project cost subject to minimum of Rs.10,000/-.
Hypothecation of Assets financed by the Bank Collateral: The account will be covered under
Collateral
guarantee scheme of NCGTC.
Proc. Fee Waived
➢ As per the scheme, GOI will provide subsidy upto a maximum of Rs.10,000/-.
➢ Stock statements and financials are required to be submitted by borrower for loans above Rs. 2 Lakhs.
➢ The MoT(Ministry of Textile), GoI, has developed “Handloom Weaver MUDRA Portal” in association with Punjab
National Bank (PNB) for online claim and disbursement of margin money subsidy, interest subvention and credit
guarantee fee which has become operational from 01.04.2017.
➢ The GOI interest Subvention will be capped at 7%.
SBI Fleet Finance Scheme
To finance new vehicles E.g. trucks/tankers/ trailers/ tippers/buses/ luxury buses & passenger
vehicles etc
➢ Minimum 3 years of experience in transport industry and other businesses Fleet operator
having existing fleet of minimum 10 vehicles.
➢ SRTOs will not be eligible.
➢ Requirement of minimum 10 new vehicles or minimum loan amount Rs. 50 Lakh.
➢ Transport operators holding national/ state route permit and other necessary
Purpose
permits/license/approval.
➢ Satisfactory track record with existing banks/FIs.
➢ Income Tax Assesse (personal & Business).
➢ Average Gross DSCR: minimum 1.50. (below 1.50, special approval from authority one step
higher than sanctioning authority).
➢ Eligibility is linked to the scores obtained under scoring model.
➢ Borrower has to get min 50% score under scoring model.
➢ Min: Rs. 50 Lakh
➢ Max: Rs. 10 Cr
Loan amount
Loans above Rs.10 Crores upto Rs.25 Crores approval required from CCC-I.
For loans above Rs.25 Crores approval required from WBCC II
Facility TL
➢ Scores between 50% to less than 60%: Max 60 months
Repayment
➢ Scores 60% and above: Max 66 months
Margin 5% to 50% (based on Scores as per Scoring Model)
Min 20% tangible collateral including unencumbered vehicles in the existing fleet where
account is not covered under CGTMSE (In case, the borrower has scored minimum 60% and
Collateral Security
above under the scoring model, sanctioning authorities may allow for ‘Nil Collateral’ with
additional 25 bps in interest rate)
Inspection Quarterly
Proc. / Upfront Fee 1% of Loan amount + GST
Upto 2 years: 4% of the outstanding amount.
Pre-payment Penalty
Beyond 2 years: 2% of the outstanding amount.

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Other Takeover cases are not allowed.

Dal Mill Plus Scheme
a) Profit making existing units with CUE rating of CUE-8 and better as per Project Vivek.
b) Take-over of good units, subject to compliance of takeover norms.
c) Newly proposed / Newly established Dal Mill units with CUE of CUE-7 and better
(greenfield units)
Eligibility d) Track record of previous two years to be considered for new connections / enhancements,
i.e. 2 years of continuous profit making.
e) Udyam Registration Certificate (for MSME units).
CRA rating to be worked out for regulatory purpose and should be better than hurdle rate SB-
10
➢ Working Capital Assessment:
Assessment
Assessment under Project Vivek using PACE Tool to re-draw Turnover and other parameters on
and Quantum
the basis of cash flows.
of loan
➢ Maximum exposure under the Product: Rs. 25 Crores
Facility Term Loan, Working Capital limit (Fund based & Non-fund based facilities)
➢ Term Loan: 8 years (including the moratorium period of maximum 12 months)
Repayment
➢ Working Capital: Repayable on demand.
Moratorium 12 months
➢ Term Loan: Min. 25%
➢ Working capital:
Margin
Stocks: Min. 25%
Book debts: Min. 40% with cover period up to 90 days
Primary Security Hypothecation of Assets financed by the Bank
i. With CGTMSE Cover:
➢ All loans upto Rs. 2 Crores are eligible to be covered under CGTMSE.
➢ Loans above Rs. 2 Crores can also be covered under CGTMSE for amount upto Rs. 2 Crores
Collateral Security under Hybrid Model (with partial collateral security). 75% Collateral security to be obtained
for amount above Rs. 2 Crores.
➢ Annual Guarantee Fee (AGF) - borne by the borrower.
ii. Without CGTMSE Cover: 75% Equitable mortgage of property / tangible security.
Simplified Small Business Loans (SSBL)
i. Existing business for at least 5 years in the same location.
ii. Should be owner of the premises or should have valid tenant agreement with the owner of
the shop, in case of rented premises for residual period of minimum>3 years and minimum
1year stay at the rented/leased premises.
iii. Current account holder at any bank for at least 2 years (proprietorship, partnership &
corporate concerns).
Eligibility
iv. Minimum average monthly balance of more than Rs. 1 Lakh in last 12 months, with monthly
threshold balance of Rs.10,000/-
v. Unit is situated within a radius of 5 km from the financing branch.
vi. The borrower should also fulfil the eligibility criteria as per (Go/No Go) approach. If any of
the parameters in gets a No response, the unit will not be considered eligible under the scheme
and no deviation is permitted.
10 times of average monthly balance in current account in previous 12 months subject to:
Loan amount
➢ Minimum: >Rs. 10 Lakh

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➢ Maximum: <Rs. 25 Lakh.

Facility Drop-line OD
Min : 1 Year
Repayment
Max: 5 Years (Reducing DP) including moratorium of maximum three month
Margin 10%
CIR score & report > 650. In the Commercial CIC report (viz. CIBIL), there should not be any NPA / Overdue
Collateral 40%
➢ Financial statements not required.
Assessment of the ➢ 10 times the average monthly balance in the current account during the previous 12 months
credit limits: subject to minimum above Rs. 10 Lakh and maximum less than Rs. 25 Lakh.
➢ The loan may also be sanctioned for acquiring fixed asset (within assessed limit) based on
the actual expenditure proposed. No separate assessment for TL is required.
Scoring model Cut off for the scheme is 50% of the scores
Stocks Statement Quarterly
Inspection Quarterly
Processing fee Fixed Unified Charges Rs. 7500/-
➢ No renewal of limit.
➢ Review annually
➢ Account is continuously irregular for 2 month, a review be put up to sanctioning authority,
Renewal / Review
suggesting future course of action.
➢ If no default, drawing power can be restituted (repayable in the residual period of loan), to
the original level by sanctioning authority or cancelled based on annual review.
➢ Unified Charges: Limit Charges: Above Rs. 10 Lakh to less than Rs. 25 Lakh Rs. 7500/-
➢ Sole banking
Other ➢ Health Insurance Now NOT Mandatory.
➢ Opening of Recurring Deposit account is now Not Mandatory.
➢ TAT= One week
SBI e-RIKSHAW under PMAY
Target Group All Manufacturers, Dealers & End user can be financed under the scheme.
Purpose Purchase of e-Rickshaw
Micro Enterprises / units those are in manufacturing, trading and services sector (including
Eligibility
individuals).
Loan Amt Max Rs. 10 Lakh
Facility TL
Repayment 4 years
Upto Rs. 50000/-: Nil,
Margin
Above Rs.50000/-: 10%
➢ Primary: Hypothecation of e-Rickshaw.
Security ➢ Collateral: Nil, All the loans are to be covered under credit guarantee scheme of CGFMU.
Cost of Guarantee cover to be borne by the borrower.
Up to 5 Lakh = Nil,
Proc. Fee
Above 5 Lakh to 10 Lakh = 0.50%+GST
As per manufacturers and present Government registration norms, useful life of E-Rickshaw is
Other
estimated to be 5 years.
SBI Corporate Home Loans
Segment SME / Non-SME

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Corporate Entities:
➢ Should be in the line of business for at least 3 years,
➢ Should have earned uninterrupted Net Profit in last 3 Years
Eligibility ➢ Existing loan accounts of the Company, if any, should be Regular and Standard and also
should not have been restructured during the last 3 years.
➢ ECR of BBB and better for units having total exposure of above Rs. 50 crores.
➢ Minimum net DSCR of 1.25, as per Cash Accruals of last three years
Minimum: Rs. 50 Lakh,
Loan Amount
Maximum: No Cap.
Facility TL
Loan Tenure 15 years (Maximum) including moratorium period.
Ready-build House- 3 Months
Moratorium Under- Construction House- Maximum 36 Months
(Interest should be serviced during the moratorium period.)
Home Interiors/
10% of the cost of the house/flat will be permitted towards Interiors/Furnishings viz. wardrobe,
Furnishings as part
modular kitchen, floorings, fixtures, fittings, etc
of the project cost
Lowest of the followings:
➢ Maximum permissible LTV Ratio,
Permissible loan Amt
➢ Minimum Gross DSCR of 1.25 (Inclusive of EMI of Proposed Home Loan),
➢ Loan amount applied for.
LTV Ratio Max 75%
(i) For Regular Accounts:
During construction period: Before every disbursement,
Inspection
Completed Projects: Every three years,
(ii) For Irregular and NPA Accounts: Every month
Processing Fee 0.50% of Loan amount + GST (Min- Rs. 50000 & Max- Rs. 10 Lakh + GST)
Pre-payment penalty @ 2% plus Service Tax.
In irregular accounts where the irregularity amount exceeds one EMI, for a period of one
Penal Interest month, then penal interest should be recovered @5% p.a. (over and above the applicable
interest rate) on the overdue amount for the period of default
Debt Service Reserve DSRA for the amount equivalent to 3 EMIs will be obtained in the form of STDR Amount
Account (DSRA towards DSRA will be recovered at the time of first disbursement of the loan
Compressed Bio Gas (CBG) under SATAT Scheme
Nature of Facility Term Loan, Working Capital
Rs. 50 Crores Max. (to be handled by RDB)
Quantum of loan
Above Rs. 50 Crores (to be handled by CCG)
Term loan repayable in 10-12 years.
The overall door-to-door tenor (moratorium + repayment tenor) not to exceed tenor of offtake
Repayment Period
agreement, which is 15 years and may be extended on mutual consent. For Renewable Energy
projects, overall door-to-door tenor permissible is upto 15 years.
Construction period / Achievement of COD: 12 – 18 months
Moratorium
Moratorium after COD: 1 year. Interest to be serviced during moratorium
Debt : Equity Min. 70 : 30
Loan to Value (LTV) 70%
Margin Term Loan: Min. 30% of Project Cost.

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Working Capital: Min. 25%

CRA Rating SB-10 & better
Primary Security Hypothecation of Stocks & Receivables
Pledge of shares: (In case of companies): 51% of shares of the borrower to be pledged where
Security Trustee is available. In other cases, as per Bank’s extant guidelines.
Collateral Security
In rare cases where mortgageability of lease-hold land is not possible, equivalent amount of
collateral to be obtained
Stock Statement Monthly (in case Working Capital limit is availed)
Inspection Periodicity: Monthly during the construction phase and Quarterly after COD.
➢ Average Gross DSCR: 1.25
DSCR
➢ Minimum DSCR: 1.15
The Ministry of New and Renewable Energy (MNRE) has notified Central Financial Assistance
Capital Subsidy (CFA) of Rs. 4 crores per 4,800 kg of CBG per day generated from 12,000 cubic meters of biogas
per day, with a maximum of Rs.10 crore per project.
Corporate Loan
✓ Borrowers having CRA/CUE rating of SB1 to SB 5, if External Credit Rating is not available.
✓ Borrowers with CRA/CUE rating of SB 6 to SB 10 or having
✓ ECR of Investment Grade (i.e. BBB-) & better.
✓ Borrowers with satisfactorily conducted accounts and should not have slipped even to SMA 1
Eligibility criteria during the last one year period.
✓ Maharatna and Navaratna PSUs irrespective of Credit Rating.
✓ ECR mandatory for exposures above Rs 50 crore.
✓ Only existing customers with minimum of three years’ relationship with the Bank are to be
considered..
Minimum: Rs 50 Lakh
Maximum: Rs 10 Cr for Non-Corporate
Quantum of loan ➢ For Central Govt PSUs enjoying Maharatna, Navratna status and Oil Marketing companies
owned by Central Govt. : As per RBI Pridential exposure Norms
➢ Cap for Corporate borrowers as per Substantial Exposure norms under Loan Policy
Nature of Facility Term Loan
10 years or the useful life of fixed assets (wherever applicable), whichever is lower, including
Repayment
moratorium period of up to one year.
Primary: First charge on assets created from financial assistance.
Collateral:
Security 1. First / Paripassu charge on fixed assets.
2. Personal Guarantee of Promoters/ Partners/ Proprietor.
Pledge of Promoters shares to be explored and obtained wherever possible
➢ Corporate Loans outstanding in the name of a Borrower at any point of time, to be restricted
to 2 loans.
➢ If the loan is availed for shoring up of NWC, the number of outstanding Corporate Loan not
Number of loans to exceed 1 at any given time.
➢ in case of irregularities in the existing CL(s) on more than 3 occasions in aggregate in the
preceding 12 months, no new Corporate Loan to be considered even if the borrower meets the
eligibility criteria.
Distressed Assets Fund - Subordinate Debt for Stressed MSMEs (DAF-SDSM)
Loan Amount 15% of Promoter’s stake in the MSME entity (equity plus debt) or Rs 75 lakhs whichever is

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lower as per last Audited Balance Sheet.

Facility Type FB Term Loan
Tenor: Maximum 10 years from the date of disbursement
Moratorium: Maximum 7 years for principal only, interest is payable at monthly intervals
Repayment The principal shall be repaid in 36 equal installments after the moratorium period is over.
Interest to be serviced as and when applied.
Pre-payment to be allowed at no additional charge to the borrower
Margin 10%
Certificate of End Use of Funds by Borrower
Disbursement &
Chartered Accountant’s Certificate to be obtained stating that the amount has been brought
ensuring End use of
in as
funds
equity, after completing the formalities.
➢ First charge over security / collateral brought in towards 10% margin under sub debt facility.
Security ➢ Second charge over assets financed under existing facilities for the entire tenor of the sub-
debt facility
Guarantee Fee ➢ 50% per annum on the guaranteed amount on outstanding basis, payable by the borrower.
payable to credit ➢ Guarantee fee to be paid by the Bank on due date (from second anniversary date onwards)
guarantee trust and shall be recovered from the borrower.
Pre sanction Inspection of the unit is mandatory.
Inspection
Post sanction inspection of the unit is to be conducted on quarterly basis.
Risk weight CGTMSE guaranteed portion i.e. 90% of coverage to be assigned zero risk weight.
Sanjeevani SME Loan for Healthcare Sector
➢ Set up of oxygen plant along with the power back up in the hospital for medical use.
Purpose
➢ To finance units engaged in manufacturing of liquid oxygen, oxygen cylinders etc.
➢ Hospitals/ Nursing Homes having constitution as Individual/Proprietorship Firm/ Partnership
Firm/ Corporate/ Trust/ Society (with powers to borrow).
➢ Owners/Promoters need not be necessarily registered qualified medical practitioners.
However, professional qualified doctors should be a part of management of the hospital.
➢ Manufacturers/ Suppliers of medical oxygen, oxygen cylinders should be registered and
should have all the Statutory Approvals.
➢ Should have the required approvals/ registrations from the statutory/ regulatory authority.
Eligibility Criteria
Necessary approvals/ licenses should also be obtained from PESO (Petroleum Explosives Safety
Organization) and FDA (Food & Drug Administration)
➢ ITR is mandatory in case of all existing units operating for more than one Financial Year
➢ Average Gross DSCR of 1.20 in case of Term Loan. DSCR calculation may be limited to
oxygen plant only.
➢ Interest Coverage Ratio > 1.5
➢ Unit should be classified as Standard Asset.
Quantum of loan Overall exposure including Term Loan and LC should not exceed Rs. 2 Crs.
Nature of Facility Term Loan, Letter of credit (Letter of Credit should be liquidated by debit to Term Loan)
Term Loan:
➢ Maximum period of 5 years including moratorium period.
➢ Maximum moratorium 6 months
Repayment Period
➢ If TL A/c becomes irregular then half yearly review to be done.
➢ Repayment can be equated or negotiated as per the cash accrual of the unit. Repayment will
have to be aligned with Cash Flows and linked with the life cycle of the project.

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➢ Interest to be serviced on a monthly basis during the moratorium period

➢ TL shall be reviewed every year
➢ LC: LC to be liquidated on due date by debit to Term Loan account.
CRA Hurdle Rate CRA SB 10. In case, guarantee cover is offered by the Government in lines with the ECLGS, units
with CRA worse than SB 10 may also be financed.
Margin Term Loan ➢ Existing customers/ hospitals with CRA SB-10 & better, 100% financing can be considered.
for setting up of ➢ New Customers= 15%.
Oxygen Plant ➢ Non-Fund (LC): 15% (Cash Margin) for all customers.
Primary Security Hypothecation of the assets financed by the Bank
➢ For MSME units: Loans to be invariably covered under CGTMSE. (Guarantee Fee to be borne
by the Bank.)
➢ In case the unit is already having existing credit facility from other Bank, Sanction letter of
other bank to be obtained to ensure that overall CGTME coverage does not exceed Rs. 2 Crs.
➢ In case of existing customer with our Bank, extension of charge should be done. Wherever
existing loans are covered under CGTMSE, it should be ensured that overall exposure (Existing
Collateral Security + Proposed) does not exceed Rs. 2 Crs under CGTMSE. In that case, additional collateral/
Extension of charge on our existing collateral should be obtained.
➢ CIBIL report should be extracted to check exposure.
➢ For Non-MSME units: Min. 25%. However, collateral requirement can be waived if
(i) Hospital has adequate cashflows and agrees to maintain escrow a/c for capturing cash flow.
(ii) The manufacturer (not a health care facility) is having a firm buying agreement from
Govt/hospitals and agrees to maintain the escrow a/c.
Guarantor In all cases (other than individuals and proprietorship concerns), personal guarantee
Guarantor
of the promoters/partners/directors of the unit will be mandatory.
Guaranteed Emergency Credit Line (GECL)
All existing MSME borrowers/Business Enterprises with:
➢ Outstanding loans upto Rs. 500 Cr as on 29.02.2020 across all Member Lending Institutions
Target Group &
(MLIs)
Eligibility
➢ Accounts should be <=60 days past due as on 29.02.2020
➢ NPA/ SMA-2 accounts as on 29.2.2020 are not eligible
Additional WCTL facility for MSME borrowers:
➢ To augment Networking capital
Purpose
➢ To Meet operational liabilities
➢ Restart their businesses affected due to COVID-19 crisis.
Facility Fund Based- Working Capital Term Loan
➢ WCTL facility up to 40 per cent of the total fund based credit outstanding across all lending
institutions as on 29.02.2020.
➢ However, such of those entities who have already availed up to 20% of the fund-based credit
Loan Amount outstanding as on 29.02.2020 under GECL-1.0 or GECL-2.0, would get additional up to 20% of
the total fund based credit outstanding as on 29.02.2020.
Max. loan amount under GECL3.0 - Rs 200.00 Cr. (including disbursements up to 20% if
any, done under GECL-1 & 2)
➢Tenor: Maximum 6 years from the date of disbursement.
➢ Moratorium: 24 months for principal only, interest is payable at monthly intervals.
Repayment Period
➢ The principal under WCTL shall be repaid in 48 instalments after the moratorium period is
over. No variation in moratorium/repayment will be allowed in order to ensure alignment with

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the Scheme/avoid rejection of Guarantee cover by NCGTC.

➢ Interest to be serviced as and when applied.
➢ Pre-payment of facilities to be allowed at no additional charge to the borrower.
Margin Nil
a) EBLR + 100 bps, present effective rate of 7.65 %, for MSMEs subject to a maximum interest
rate of 9.25% p.a.
Interest Rate OR
b) 6 months MCLR + 100 bps, present effective rate of 7.95% for other units subject to a
maximum interest rate of 9.25% p.a.
➢ Branches to ensure that the loan amount proposed under GECL-3.0 does not exceed 40% of their fund based
outstanding as on 29.02.2020 (in the Hospitality, Travel & Tourism and Leisure & Sporting sectors).
➢ Disbursements to be made compulsorily after obtaining CGPAN.
➢ The aggregate limit of Rs. 500.00 Cr will be reckoned on the basis of loans outstanding with all lenders as on
29.2.2020.
CLP Mudra - Scheme
Loan Amount Rs.1.00 Lakh to Rs.10.00 Lakh
Facility TL or CC
Margin 20%
Term Loan- Rs.1 lakh to Rs.5 lakh: Max. 5 years including maximum moratorium period of up
to 6 months
Repayment From Rs.5 lakh to Rs.10 lakh: Max. 7 years including maximum moratorium period of up to 12
months. Repayment of TL to be made in EMI only
Cash Credit: On Demand
Upto Rs.5.00 Lakh: Nil
Processing fee
Above Rs.5.00 Lakh: 0.50% plus applicable GST
TL – Hypothecation of Plant and machinery / other assets or Mortgage of Land / Property,
Primary Security created out of Bank finance.
CC/OD – Hypothecation of all Stocks and Receivables
Collateral Security Nil
Credit Guarantee CGFMU
Inspection Half yearly
Review Renewal annually
SME Finance for CA Firm
CA Firms (Proprietorship/ Partnership) registered with the Institute of Chartered Accountants of
Target Group
India and currently under practice.
➢ CA firm should be registered with ICAI.
➢ Promotor’s Age: Minimum: 25 Years, Maximum: 65 years
➢ CA must have Certificate of Membership (CoM)/ Certificate of Practice (CoP) issued by ICAI.
CoM/ CoP should be at least 5 years old.
Eligibility
➢ Minimum ITR – ITR for past 3 years should be available.
➢ The applicant must obtain a above 60% score as per score card under the scheme.
➢ Applicant must be registered in UDYAM portal as MSME.
➢ Applicants with CIBIL score below 650 will be ineligible.
Facility Overdraft, Term Loan
➢ Overdraft: Min: Rs. 2 Lakhs; Max. Rs. 25 Lakhs.
Quantum of loan
➢ Term Loan: Min. Rs. 2 Lakhs;

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Max: (i) Metros: Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Bengaluru: Rs. 100 Lakhs
(ii) Other Centres (State Capital/ Tier-I cities): Max. Rs. 75 Lakhs
Term Loan: 75% of the project cost.
Assessment Overdraft: 25% of Gross Receipts of the CA Firm.
Max. Rs. 25 Lakhs.
Margin Term Loan: 25%, Overdraft: Nil
Overdraft: Nil.
Primary Security
Term Loan: Assets created out of bank finance
Overdraft: Nil.
Collateral security
Term Loan: Loan to be covered under CGTMSE. CGTMSE fee to be borne by borrower.
Overdraft: On demand.
Repayment
Term Loan: Repayable in 60 EMIs. (With maximum moratorium of 12 months)
➢ Up to Rs. 10 lakhs: Rs. 500 plus applicable taxes
Processing Fee
➢ Above Rs. 10 lakhs: Rs. 1000 plus applicable taxes
Pre-Payment Penalty Nil
5% p.a. over and above the existing rate of interest on overdue amount for the period of
Penal Interest
default (as per CPPD card rate).
Not required. However, for TL, schedule of fixed assets created out of bank finance to be
Stock Statement
obtained and annexed to SME-2.
Inspection For Term Loans: Quarterly
DSCR 1.50
➢ Takeover is not proposed.
➢ Current accounts with other banks to be closed.
Other Conditions
➢ All transactions to be routed through our Current account (OD account).
➢ Disbursement (Term Loan): Directly to the supplier’s account
Post Sanction Process
The basic objective of any follow up system is to ensure safety of advances granted by the bank.
Post sanction process starts after sanction of loan.
Post sanction process comprises of three stages: Follow-up, Supervision & Monitoring (FSM)
A) Follow up :
➢ To be undertaken by RMSME/CSO/AMT/Branch Head.

B) Supervision:
➢ To be undertaken by controllers like RM(RBO)/DGM(B&O))
➢ To ensure that effective follow up of advances is in place and asset quality is maintained
➢ To look for early warning signals, identify them and initiate proactive remedial measures.

C) Monitoring function:
➢ To be undertaken by GM’s assisted by DGM & CCO
➢ To ensure that effective supervision is maintained on loans/advances.
➢ To monitor the asset quality on ongoing basis.
Post Sanction Monitoring - obtention of GST Returns: GST Return (GSTR 1, 2 & 3) should be obtained from
Borrowers enjoying Working Capital Exposure (FB+NFB) of Rs. 50 crore and above from the banking system, at half-
yearly intervals.
Stock Statement (Format FSM-3) to be submitted monthly by unit or as per frequency prescribed in relevant scheme
(within 20 days of the succeeding month) duly signed by authorized person.

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Collateral securities are required to be inspected atleast once in a year.

TL of Rs. 5.00 crores and above, verification of assets to be conducted within 15 days of creation of assets.
Formats Purpose
FSM-1 Indicative List of Activities involved in Follow up supervision and Monitoring
FSM-3 Stock statements Format
FSM-4 Follow up Register for monitoring timely receipt of FFRs /statements
FSM-6 Inspection Report Format
FSM-7 Format of Inspection Register ( Inspection at a glance Register )
Stressed Asset Management
Risk Grade & SMA Structure
Risk Grade description
RG 00 (SMA-0) Account is regular or Principal or interest payment or any other amount wholly or partially
overdue between 1-30 days
RG 01 (SMA-1) Principal or interest payment or any other amount wholly or partially overdue between 31-60
days
RG 02 (SMA-2) Principal or interest payment or any other amount wholly or partially overdue between 61-90
days
RG 03 Standard Asset but temporarily Irregular up to 30 days
RG 04 Sub-Standard Asset
RG 05 Doubtful 1 Asset –Less than 1 Year
RG 06 Doubtful 2 Asset = > 1 Year but < 3 Years
RG 07 Doubtful 3 Asset => 3 Years
RG 08 Loss Asset
RG 09 Regular Accounts which do not show signs of incipient stress.
Asset Classification
Assets classified into Standard, Sub standard, Doubtful, Loss. Except standard all others are NPAs.
➢ Performing Assets or Standard Assets i.e. where the advances are earning interest income on an actual realization
basis.
➢ Sub standard Assets - When an account becomes NPA it is called Sub standard asset. An account remains sub
standard up to 12 months from the date of becoming NPA
➢ Doubtful Assets: An asset is to be classified as doubtful, if it has remained NPA or sub standard for a period
exceeding 12 months.
➢ Loss Assets: A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI
inspection but the amount has not been written off wholly.
➢ Term Loan - If Interest and/ or installment of principal remain overdue for a period of more than 90 days.
➢ CC/Overdraft - if the account remains 'out of order or the limit is not renewed/reviewed within 180 days from the
due date of renewal.
Out of order means an account where
(i) the balance is continuously more than the sanctioned limit or drawing power OR
(ii) where as on the date of Balance Sheet, there is no credit in the account continuously for 90 days or credit is less
than interest debited OR
(iii) where stock statement not received for 3 months or more.
Overdue – any amount to the bank under any credit facility is ‘overdue’ if it is not paid on due date fixed by the bank.
➢ Bills - If the bill remains overdue for a period of more than 90 days from due date of payment
➢ The amount of liquidity facility remains outstanding for more than 90 days, in case of a securitisation transaction
undertaken.

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➢ In case of interest payments, an account should be classified as NPA only if the interest due and charged during
any quarter is not serviced fully within 90 days from the end of the quarter.
➢ Regular and Adhoc credit limits need to be reviewed/ regularised not later than three months from the due date/
date of ad-hoc sanction. In any case, an account where the regular /Adhoc credit limits have not been reviewed/
renewed within 180 days from the due date/ date of Adhoc sanction will be treated as NPA.
NPA Tracking For Crop Loans
➢ Short term crops: If the life cycle of any crop (sowing to harvesting period or plantation to harvesting period) is
completed within 12 months period, such crops are called short term crops.
➢ Long term crops: Those crops which are not covered under short duration crops, where the life cycle of the crops
extends beyond 12 months from planting to harvesting period are called Long term crops.
➢ if loan has been granted for short duration crop: interest and/or installment of principal remains overdue for two
crop seasons beyond the due date.
➢ if loan has been granted for long duration crop: interest and/or installment of principal remains overdue for one
crop season beyond due date.
➢ Crop season period considered for Short term crops is 12 months and for Long term crops it is 18 months.
➢ In this ideal situation, Revised Kisan Credit Card (RKCC) account will become NPA at the end of 36 months if not
renewed.
➢ Decision about crop duration to be taken by SLBC.
➢ These norms shall be applicable only to Farm Credit.
➢ In regard to agricultural loans to other than the above category of borrowers or term loans given to non-
agriculturists, identification of NPAs will be done on the basis of 90 days delinquency norm.
➢ Advances against Bank’s own Term Deposits, NSCs, KVPs, IVPs, surrender value of Life Insurance Policy etc.:
Such accounts would not be classified as NPAs provided adequate margin is available.
➢ However, advances granted against gold ornaments, government securities and all other securities shall not be
covered by this exemption.
Advances under Consortium Arrangements: Classification shall be done based on the record of recovery of the
individual member banks and other aspects having a bearing on the recoverability of the advances.
Loans with moratorium for payment of interest:
(i) Payment of interest becomes ‘due’ only after the moratorium or gestation period is over. They become overdue
after the due date for payment of interest, if uncollected.
(ii) In case of a housing loan or similar advances granted to staff members where interest if payable after the recovery
of principal, interest need not be considered as overdue from the first quarter onwards, such become NPA only when
there is a default in repayment of installment of principal or payment of interest on the respective due dates.
Government guaranteed accounts:
➢ Central Government guaranteed credit facilities may be treated as NPA only when the Government repudiates
its guarantee when invoked. However, this exemption shall not be available for the purpose of recognition of income.
➢ State Government guaranteed advances and investments in State Government guaranteed securities would attract
asset classification and provisioning norms if interest and/or principal or any other amount due to the Bank remains
overdue for more than 90 days.
Unsecured advances: An exposure (FB+NFB) where the realisable value of the security, as assessed by the
bank/approved valuers/Reserve Bank’s inspecting officers, is not more than 10% or ab-initio unsecured advances
accounts.
Accounts where there is erosion in the value of security/ frauds committed by borrowers: In cases of such serious
credit impairment, asset should be straightaway classified as doubtful or loss asset as appropriate:
i) If realizable value of security is less than 50% of the value assessed by the Bank or accepted by RBI at the time of
last inspection, it may be classified under Doubtful category,

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ii) If realizable value of the security as assessed by the Bank/ approved valuers/ RBI, is less than 10% of the
outstanding in the borrowal accounts, the asset shall be straightaway classified as Loss asset.
➢ Income from NPAs is not recognized on accrual basis but is booked only when actually received.
➢ Interest on advances against Term Deposits, NSCs, IVPs, KVPs and Life Insurance policies may be taken to income
account on the due date, provided adequate margin is available in the accounts.
➢ If any advance, including bills purchased and discounted, becomes NPA, the entire interest accrued and credited to
income account in the past periods, should be reversed if the same is not realized. This will apply to Government
guaranteed accounts also.
➢ Asset classification shall be borrower-wise and not facility-wise.
Appropriation of recovery in NPAs: following priority.
a. Charges
b. Unrealized Interest
c. Interest
d. Principal
Provisioning
Assets Provision Standard Asset
Farm Credit to agricultural activities 0.25%
Advances to Small and Micro Enterprises 0.25%
Commercial Real Estate (CRE) Sector) 1%
Commercial Real Estate Residential Housing Sector (CRE-RH) 0.75%
All other loan & advance & Medium enterprises 0.40%
Wilful Defaulters 5%
Asset Classification Period as NPA Normal provisioning (%) Accelerated provisioning (%)
Sub-standard Up to 6 months 15 15
(Secured) 6 months to 1 year 15 25
25 (other than infrastructure loans)
Up to 6 months 25
Sub-standard 20 (infrastructure loans)
(Unsecured ab-initio) 25 (other than infrastructure loans)
6 months to 1 year 40
20 (infrastructure loans)
25 (secured portion) 40 (secured portion)
Doubtful I 2nd year
100 (unsecured portion) 100 (unsecured portion)
40 (secured portion) 100 for both secured &
Doubtful II 3rd & 4th year
100 (unsecured portion) unsecured portions.
Doubtful III 5 year onwards
th
100 100
Loss Assets 100% of the outstanding
Any fresh exposure to Non-Cooperative borrower will by implication entail greater risk necessitating higher
provisioning.
Holding on operations
➢ The holding on operations (HOO) would consist of freezing the bank’s exposure at the sanctioned limit or average
daily exposure during the previous one month prior to the date of reporting, whichever is higher and allowing
operations within such frozen limit.

➢ Holding on operations would commence from the date branch identifies an SMA or a Sub- standard account as
‘potentially viable’. Such holding on operations (HOO) would not require any administrative clearance / approval
/sanction and would need only to be reported to the reviewing authority.

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➢ The reviewing authority would take the report on commencement of holding on operations on record and would
give necessary directions to the branch on the proposed action plan.

➢ If holding on operations continued beyond the initial period of 3 months, the same has to be approved by the
sanctioning authority.
CRILC
➢ Details of all borrowers having aggregate fund-based and non-fund based exposure of Rs.5.00 crore and above
mentioning classification of an account as Standard / SMA / NPA.
➢ Details of Current Accounts / Current Account overdraft with outstanding balance (debit or credit) of Rs.1.00
crore and above.
➢ The above details are required to be reported on monthly basis as end of every month.
➢ In case of borrower entities in default (SMAs / NPAs), with aggregate exposure of Rs. 5 crores and above, the
details are required to be submitted to CRILC on a weekly basis at the close of business on every Friday or the
preceding working day if Friday happens to be a holiday.
➢ Banks are also required to report classification of borrower as Non-Cooperative Borrowers to CRILC as and when
any borrower is classified as Non-Cooperative Borrowers.
Non-Cooperative Borrower is one who does not engage constructively with the Bank, defaulting in timely repayment
of dues while having ability to pay, thwarting Bank’s efforts for recovery of their dues by not providing necessary
information sought, denying access to assets financed/collateral securities, obstructing sale of securities, etc. In effect, a
Non-Cooperative Borrower is a defaulter who deliberately stone walls legitimate efforts of the Bank to recover their
dues.
Willful default:
a) Default in an account where the borrower fails to repay the dues despite having the capacity to do so.
b. Default in an account where the borrower has diverted or siphoned off the proceeds of loan/ credit facility for any
purpose other than the purpose for which such loan/ facility is sanctioned.
c. Default in an account where the borrower has wrongfully disposed of any of the assets/property charged to the
Bank.
Provisioning in respect of Exposure to Wilful Defaulters will be (a) 5% in cases of Standard accounts and (b) in case
of NPA account accelerated provisioning shall apply.
Valuation of security for provisioning purposes:
➢ With a view to bringing down divergence arising out of difference in assessment of the value of security, in cases of
NPAs with balance of Rs. 5 crores and above, stock and receivable audit at annual intervals by empanelled Stock
and Receivable Auditors is to be got done in order to enhance the reliability on stock valuation.
➢ Collaterals such as immovable properties charged in favour of the Bank should be got valued once in three years
by Bank’s empanelled valuers.
Policies on different aspects of NPA management are being drawn up by SARG and is reviewed periodically.
Time norms for CAPSA reporting and review
Process Time Frame
Submission of Report (SMA/Irregular in a calendar month, report by 10 of the following month)
th
10 days
Approval for CAPSA (by reviewing authority) 10 days
Completion of viability study, if necessary, and submission of restructuring / rehabilitation package /
40 days
appraisal memorandum and obtention of sanction from sanctioning authority
TOTAL 60 days
➢ Irregularity in NPA accounts will be reported on advances account being classified as NPA.
➢ Report has to be submitted within 10th day of subsequent month to the sanctioning authority.
➢ Thereafter, yearly reporting to sanctioning authority for information.

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Early Warning Signal: EWS is to identify the building of stress in an account having an exposure of Rs. 1.00 cr and
above in an incipient stage and alert the operating functionaries well ahead of time to take corrective action and thus
prevent the slippage.
Based on the extant guidelines on Early Warning Signals / SMAs, the branch / SMEC / RASMEC maintaining the
account shall forward the stressed accounts with aggregate loan limits above Rs.10 lacs to the designated committee
for a suitable Resolution Plan (RP) within 5 working days.
Interest income in respect of restructured accounts classified as 'standard assets' may be recognized
on accrual basis and that in respect of the restructured accounts classified as 'non-performing assets'
shall be recognised on cash basis.
Restructured accounts, classified as non-performing assets upon restructuring, when upgraded to
standard category will attract a higher provision of 5% in the first year from the date of upgradation.
The irregular portion of the cash credit account (Principal dues after reducing the Drawing Power), would be funded
as Working Capital Term Loan (WCTL).
Unpaid interest portion of both term loan and cash credit is funded as Funded Interest Term Loan (FITL).
Promoters’ sacrifice and additional funds brought by them should be minimum of 20% of bank’s sacrifice or 2% of
restructured debt, whichever is higher.
Special Scheme(window) for Restructuring of MSME Sector Advances: The scheme will cover all Stressed MSME
units having aggregate exposure (FB + NFB limits) not exceeding Rs.25.00 Cr as on 01.01.2019 and banking with us
under Sole Banking arrangement including accounts under Consortium and
Multiple Banking arrangement.
Sale of properties under SARFAESI Act, 2002
SARFAESI means = Securitization, Reconstruction of Financial Assets and Enforcement of Security Interest
Eligibility criteria:
A) The account should be an NPA as per RBI guidelines.
B) The claim amount (including accrued interest) should be for an amount not less than Rs.1.00 lac.
C) The amount due (including interest) should be more than 20% of the principal amount and interest thereon.
Authorised Officer has the authority to initiate action under the Act and issue notices. As per the Security Interest
(Enforcement) Rules, 2002 (the Rules), ‘Authorised officer’ means an officer not less than a Chief Manager of a public
sector bank or equivalent.
SARFAESI came into force on___ 21.08.2002
Notice under Section 13(2) of SARFAESI 2002, relates to Demand Notice
Notice under Section 13(4) of SARFAESI 2002, relates to Possession Notice
Under which recovery measures, Notice under Section 13(2) of SARFAESI Act comes? Soft recovery measures
➢ If Demand Notices could not be served on the Borrower(s)/Guarantor(s), as per the SARFAESI Rules, the service
should be effected by affixing a copy of the demand notice on the outer door/other conspicuous place where the
Borrower(s) /Guarantor(s) reside, photographs of the same should be taken and kept on record to be used as an
evidence in case of need.
➢ Contents of the notice to be published in two leading newspapers, one in English and one vernacular, having
sufficient circulation in that locality.
Handling of Objections Raised by the Borrower: Authorized Officer shall consider such representation or objection
carefully and if he comes to the conclusion that such representation or objection is not acceptable or tenable, he shall
communicate the reasons for non- acceptance within 15 days of receipt of such representation or objection.
If the amount mentioned in the demand notice is not paid within the time specified i.e. 60 days from the date of
notice under section 13 (2), the Authorized Officer may take possession of the secured assets of the borrower
including the right to transfer by way of lease, assignment or sale for realizing the secured asset.
Consent in Case of Consortium / Multiple Banking Accounts: When security which is held by more than one

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Secured Creditor or jointly financed by Secured Creditors, action under section 13(4) can be taken if exercise of rights
under the Act is agreed upon by the Secured Creditors, representing not less than 60% in value of the amount
outstanding as on a record date.
Filing of Caveat: When action under Section 13(4) of the Act is taken by the Bank, the Borrower(s)/Guarantor(s) may
file a Securitisation Application before the DRT u/s 17 of the SARFAESI Act within 45 days challenging such action.
Possession of Movable/Immovable Properties: After expiry of 60 days from the date of notice u/s 13(2), action
should be initiated for taking possession of the property.
Notice regarding possession of the immovable property with full details of the property and name of Borrower(s) /
Guarantor(s) should be published within 7 days of taking possession in two leading news papers, of which one should
be in vernacular language having sufficient circulation in that locality.
➢ The Borrower(s) / Guarantor(s) should be served 30 days notice for sale of movable and immovable secured
assets.
➢ The sale can be conducted only after expiry of 30 days notice given to Borrower(s)/ Guarantor(s)/legal heirs of
Borrower(s)/Guarantor(s).
➢ A public sale notice should be published in two leading newspapers, one in vernacular language having sufficient
circulation in the locality.
The Authorized Officer shall ensure registration of Sale Certificate on making payment as per stamp Act, and charges
as applicable in the respective State, cost of which will be borne by the purchaser.
After failure of the first sale of the immovable property, only 15 days’ notice is required to be served for any
subsequent sales.
Time frame for different activities under SARFAESI Act
The borrower /guarantor in demand notice to repay the dues 60 days
The borrower can submit representation / objection to the above notice 60 days
The Bank has to convey its decision against the above representation/objection 15 days
Bank has to permit for the borrower to repay the debt, while issuing the sale Notice 30 days
Borrower can file a petition in the DRT against Bank for having taken possession of
Within 45 days
property
DRT has to pass the order for the above Within 4 months
Bank / Borrower can file appeal with the Appellate Tribunal against the order of the
Within 30 days
DRT
Possession Notice of the immovable property should be published within …….. of
taking possession in two leading newspapers, of which one should be in vernacular 7 days
language having sufficient circulation in that locality.
Civil Court
➢ The amount of total debt due from the borrower should be less than Rs.20 lacs.
➢ Documents should not be time barred and should be in order.
➢ Civil suit is to be filed immediately on approval but in any case, within a maximum period of 3 months from the date
of approval.
➢ Borrowers / guarantor to file the written statement within 30 days from the date of receipt of summons. The date
can be extended by the court up to 90 days. Any adjournment sought for filing written statement should be strongly
opposed.
Debt Recovery Tribunal (DRT)
➢ Established on the recommendation of Narasimham Committee.
➢ The bank has to file cases for recovery of debts of Rs. 20 lac and above.
➢ Call up notice to be served on the Borrower(s)/Guarantor(s) through Bank’s empanelled Advocate demanding
payment of the Bank’s dues within 30 days.

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➢ Original Application (OA) is to be filed in DRT immediately on approval but in any case, within a maximum period
of 3 months from the date of approval.
➢ Where documents are getting time barred, Original Application (OA) in DRT is to be filed at least 2 months before
expiry of documents.
➢ OA to be drafted by the Bank’s empanelled Advocate based on the facts/figures/documents provided by the branch
within 7 days from the date of handing over the same and it is to be vetted by the Bank’s Law Officer.
➢ The tribunal has to dispose of the cases within 6 months.
➢ The Bank, Borrower/Guarantor or any third aggrieved by the order of DRT may file appeal with Appellant Tribunal
(DRAT) within a period of 30 days from the date on which copies of the orders made by the DRT are received.
➢ Borrower / Guarantors, are required to deposit with the Appellate Tribunal, 50% of the amount of debt due as
determined by the DRT for filing the appeal with the DRAT. However, if the Bank decides to file an appeal against the
Order of DRT, it may file by paying prescribed fee:
Amount of debt due Amount of fee payable
Rs. 10 Lac or more but less than Rs. 30 Lac Rs. 20,000/-
Rs. 30 Lac or more Rs. 30,000/-

➢ The Appeal can be filed even after the expiry of 30 days by filing an application for condonation of delay subject to
discretion and satisfaction of the Appellate Tribunal for the reasons of delay.
The Recovery Certificate issued by the DRT is sent to _____________ for execution Recovery Officer
Recovery certificate is issued by Presiding officer of the DRT
The appeal against the order of DRT, is required to be filed before _____ DRAT
Lok Adalat:
➢ Set up under the Legal Services Authority Act, 1987
➢ Dues up to Rs. 20 lakh can be settled.
➢ An award made by the Lok Adalat is deemed to be a decree of a civil court and is final and binding on all parties.
➢ The compromise settled may be paid in monthly / quarterly installments or as per income generation within a period
not exceeding a total period of 36 months.
Post possession process and sale of property
1) Valuation Report should be less than 12 months old for fixing Reserve Price. Two valuation reports to be obtained
for properties valued above Rs.1.00 Crore from empanelled SARFAESI valuer only and higher of the two values to be
considered.
2) Reserve price to be fixed at realisable value of the securities and the reasons viz. defects/issues involved in sale of
the securities have to be furnished where the difference between market value & realisable value is more than 15%.
3) Minimum Time Bank has to permit for the borrower to repay the debt, while issuing the sale Notice - 30 days from
the date of notice.
4) Immediate payment of 25% of sale price required by the winning bidder. Balance to be paid on or before 15th day
of confirmation of sale or such extended period as agreed upon but not exceeding 3 months from the date of
Auction.
5) In case sale is required to be conducted again due to any reason, the Authorized Officer shall serve, affix and
publish notice of sale of not less than 15 days to the borrower for any subsequent sale by publishing the sale notice.
Compromise Settlement Policy
➢ Valuation reports are not more than twelve months old. In case value of property is above Rs. 1 Cr, two valuation
reports from Bank’s approved valuers have to be obtained and the higher value has to be taken into account for
deciding the compromise amount.
➢ The Net Present Value (NPV) of settlement amount should generally not be less than NPV of the realizable value
of the available securities.

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➢ For calculation of NPV, the rate of discount should be taken as the Prevalent Benchmark Rate (presently MCLR) for
one-year tenor with annual rests and the maximum estimated time to realize the securities may be taken as
(i) 5 years from the date of notice under section 13(2) in case of SARFAESI action and
(ii) 7 years from the date of filing suits in case of DRT / Court cases.
➢ Initial deposit of at least 5% of the offer amount may be taken from the borrower under no lien account as an
evidence of the borrower's intention to pursue the compromise settlement with the Bank.
➢ 15% of the approved settlement amount (inclusive of initial deposit) would be payable upfront with the balance
installments spread over a maximum period of 12 months.
➢ Repayments exceeding 12 months should not generally be considered, however, if extended beyond 12 months due
to bonafide reasons it shall not be extended beyond a period of 18 months without obtaining administrative approval
from an official not below the rank of Chief General Manager.
➢ To incentivize early payment, no interest is to be charged on the compromise amount paid within four months
from the date of approval of compromise.
➢ In case of willful defaulters, initial deposit under no lien accounts will be 15% of offer amount and on approval of
the compromise, upfront payment including initial deposit will be 25% of the approved compromise amount.
In a compromise settlement, before the approval of the settlement, the initial payment
Kept in NO LIEN Account
received from the borrower will be credited to _______
Compromise Process will be initiated ……… the Bank has exercised its right to set off or
After
lien against any deposits of the borrower/guarantor lying with the Bank.
Export & Import Finance
Ministry of Commerce through …….. regulates Foreign Trade Policy. DGFT
Export finance has been included in Priority sector lending, subject to incremental export 2%
credit of up to …. of Adjusted Net bank Credit (ANBC) or credit equivalent amount of off-
balance sheet exposure, whichever is higher, w.e.f 1st April 2015
Only sanctioned limit of up to Rs …. per borrower having turnover of up to Rs 100 Crore is 25 Crore
to be treated as priority sector.
The period for which the Bank gives packing credit depends upon the manufacturing / trade 180 days, 90 days, 270
cycle or specific requirements of the individual export, normally not exceeding …. days, days
extendable by another …. days i.e., … days.
EPC loans are usually restricted to the lower of …. of FOB value of the contract or the 90%
domestic cost of production.
Branches should mark off individual export bills, as and when they are received for First in First Out
negotiation / collection, against the earliest outstanding Pre- shipment credit on ‘…. basis (FIFO)
In case of demand (sight) bills, period of advance shall be the Normal Transit Period 25 days
(NTP) ………. Days as specified by FEDAI.
In case of usance bills, credit can be granted for a maximum duration of ….. days from date 270 days
of shipment inclusive of Normal Transit Period (NTP) and grace period, if any.

Abbreviation
SLAMT Small loan Asset Management Team
CRILC Central Repository of Information on Large Credits
EPFO Employees Provident Fund Organisation
RACC Retail Asset Credit Centre
ECCB Executive Committee of the Central Board
BCG Boston Consultancy Group
TIR Title Investigation Report

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VMS Vendor Management System

CERSAI Central Registry of Securitization Asset Reconstruction and Security Interest of India
ICAI Institute of Chartered Accountants of India
ROCE Return on Capital Employed
ROA Return on Asset
DSCR Debt Service Coverage Ratio
IRR Internal rate of return
BEP Break Even Point
SMCR Security Margin Coverage Ratio
FACR Fixed Asset Coverage Ratio
BCBS Basel Committee on Banking Supervision
RAROC Risk Adjusted Return on Capital
GSTIN Goods and Services Tax Identification Number
URC Udyam Registration Certificate
CGTMSE Credit Guarantee Fund Trust For Micro & Small Enterprises
CGFSIL Credit Guarantee Fund Scheme for Stand Up India Loans
CGSSI Credit Guarantee Scheme for Stand Up India
NCGTC National Credit Guarantee Trustee Company Ltd
SCFU Supply Chain Finance Unit
FSM Follow-up, Supervision & Monitoring
CAPSA Corrective Action Plan for Stressed Assets
SMA Special Mention Accounts
FITL Funded Interest Term Loan
WCTL Working Capital Term Loan
PCFC Pre-shipment Credit in Foreign Currency
NPLL Normally Permitted Lending Limit
ASCL Aggregate Sanctioned Credit Limit
BERI Bank Exposure Risk Index
MBA Multiple Banking Arrangement
GBEL Global Bank Exposure Limit
RCC Regional Credit Committee
ZCC Zonal Credit Committee
CLCC Circle Level Credit Committee
LCCC Loan Control Committee of Circle
CCRD Circle Credit Review Department
CCCC Corporate Centre Credit Committee
CCCCC Corporate Centre Credit Committee for Control
IAS Indian Accounting Standards
IFRS International Financial Reporting Standards
ABF Assessed Bank Finance
DSCB Domestic Schedule Commercial Bank
ECCB Executive Committee of the Central Board
CGTMSE Credit guarantee fund trust for Micro and small enterprises
CGFMU Credit guarantee fund for Micro unit
EBLR External benchmark lending rate

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UFCE Un-hedged Foreign Currency Exposure

LRD Lease rental discounting
CPPC Credit Policy & Procedures Committee
CRMC Credit Risk Management Committee
RMCB Risk Management Committee of the Board
IFSC International Financial Services Centres
IRAC Income Recognition Asset Classification
EPC Export Packing Credit
DCCO Date of Commencement of Commercial Operations
AUCA Advances Under Collection Account
CIRP Corporate Insolvency Resolution Process
CRILC Central Repository of Information on Large Credits
NCLT National Company Law Tribunal
DRT Debt Recovery Tribunal
IBBI Insolvency and Bankruptcy Board of India
FEDAI Foreign Exchange Dealer’s Association of India
LIE Lender’s Independent Engineer
NSFR Net Stable Funding Ratio
QRR Quarterly Results Report
CFC Chlorofluorocarbons
ECB External Commercial Borrowings
CAPSA Corrective Action Plan for Stressed Assets
LOC Look out circular
BIFR Board for Industrial & Financial Reconstruction
ECIB Export Credit Insurance for Banks
LEF Large Exposures Framework
IPEL Internal Prudential Exposure Limit
PGEL Permissible Global Exposure Limit
ASCL Aggregate Sanctioned Credit Limit
FPC Fair Practice Code
FITL Funded Interest Term Loan
PQI Portfolio Quality Index

Sunil Kumar Achara, Trainee Officer 2021 / 01/01/2022