You are on page 1of 397

SME POWER CURRENT ACCOUNTS

Category Name Product code Product description

Current account POWER PACK 5096-2401 CA-POWERPACK-PUB OTH-ALL-INR


Charges set in the CBS system

QAB (Quarterly Average Rs 5.00 LACS Balance) Penalty for non maintenance Rs.10,000/ - per quarter of QAB Rs.5000/Penalty for closing account within 12 Months Cash deposit at Home Branch
CASH TRANSACTIONS Unlimited free, no charges

--do---do--

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually

Free

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in the CBS system

Unlimited -Free Free


Non home Charges with Rebate set in the CBS system

NON CASH TRANSACTIONS Drafts/Bankers cheque Free


Outstation Cheque collection 25% of normal charges Inter-core transactions Free 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2. When funds are transferred 1

To be charged manually (Concession available only in home branch) To be charged manually

Charges set in the CBS system

from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Issue charge free Tr. Charge free Corporate Internet Banking Available ATM cum International card with debit card withdrawal limit of Rs.50,000 per day(Power Pack card to be issued) RTGS Free NEFT Free Standing Instructions Free Issue of duplicate statements Free Issue of cheque books (Other Free than Multicity cheques) Car Loans Pre approved car loans for promoters Demat services Free in the name of the firm/corporate eZ trade Free in the name of the firm/corporate Salary accounts All category of salary accounts for the employees of the firm/corporate

Category Name Product code Product description QAB (Quarterly Average Balance)
2

Current account POWER PREMIUM 5096-2411 CA-POWER PREMIUM-PUB OTHALL-INR


Rs.4,00,000/-

Remarks

Charges set in theCBS

system

Penalty for non maintenance of QAB Penalty for closing account within 12 months

Rs9,000/- per quarter Rs.4000/-

--do---do--

CASH TRANSACTIONS Upto Rs.30lacs free per month, Cash deposit in Home Branch For amount above Rs.30lacs @ Rs.25/per lac or Part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

25% of normal charges [0.05% of amt deposited; Min Rs.25/- + normal Cash handling free]

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Unlimited -Free

25% of normal charges (Re0.50/Rs.1000/-) Min Rs.25/-

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs.0.25/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Corporate Internet Banking ATM cum debit card

25% of normal charges

Intra cityFree
Inter city- 25% of normal charges

Charges set in the CBS system

(Re.0.375/Rs.1000) Min Rs.25/MaxRs.1250 Issue charge free Tr. Charge - free

Available
International card with withdrawal limit of Rs.50,000 per day(Power Pack card to be issued) Free Free Free Free Free Pre approved car loans for promoters Free in the name of the firm/corporate Free in the name of the firm/corporate 3

RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade

Salary accounts

All category of salary accounts for the Employees of the firm/corporate

Category Name Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months Cash deposit in Home Branch

Current account POWER PRIVILEGE 5096-2421 CA-POWER PRIVILEGE-PUB OTHALLINR


Rs.3,00,000/Rs.8,000/- per quarter Rs.3000/-

Remarks

Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.25lacs free per month, For amount above Rs.25lacs @ Rs.25/per lac or part thereof

Charges set in the CBS system. Customers will be charged at the end of month based on the

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

30% of normal charges [0.06% of amt deposited; Min Rs.25/- + normal Cash handling free]

amount of transactions Charges with Rebate set in The CBS system

Unlimited -Free 30% of normal charges(Re0.60/Rs.1000/-) Min Rs.25/-

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs.0.30/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges.

50% of normal charges

Intra cityFree
Inter city- 30% of normal charges

Charges set in the CBS system

2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

(Re.0.45/Rs.1000) Min Rs.25/- MaxRs.1250

Issue charge free Tr. Charge - free

Available
International card with withdrawal limit of Rs.50,000 per day(Power Pack card to be issued) Free Free Free Free Free NA Free in the name of the firm/corporate Free in the name of the firm/corporate All category of salary accounts for the Employees of the firm/corporate

Category Name Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months

Current account POWER ADVANTAGE 5096-2431 CA-POWER ADVANTAGE-PUB OTHALLINR


Rs.2,00,000/Rs.7,000/- per quarter Rs.2000/-

Remarks

Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.20lacs free per month, Cash deposit in Home Branch For amount above Rs.20lacs @ Rs.25/per lac or part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch 6

40% of normal charges [0.8% of amt deposited; Min Rs.25/- + normal Cash handling free]

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Unlimited -Free

Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

40% of normal charges(Re0.80/Rs.1000/-) Min Rs.25/-

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs.0.40/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges.

50% of normal charges

Intra cityFree
Inter city- 40% of normal charges

Charges set in the CBS system

2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

(Re.0.6/Rs.1000) Min Rs.25/- MaxRs.1250

Issue charge free Tr. Charge - free

Available
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued) Free Free Free Free Free NA Free in the name of the firm/corporate Free in the name of the firm/corporate Silver & Gold salary Accounts for all Employees of the firm

Category Name Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months Cash deposit in Home Branch

Current account POWER GAIN 5095-2401 CA-POWER GAIN-PUB OTH-ALL-INR


Rs.1,00,000/Rs.6,000/- per quarter Rs.1000/-

Remarks

Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.15lacs free per month, For amount above Rs.15lacs @ Rs.25/per lac or part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

50% of normal charges [0.1% of amt deposited; Min Rs.25/- + normal Cash handling applicable] Unlimited -Free 50% of normal charges. 0.1% of amount encashed. Min Rs.25/-

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Non home Charges with Rebate set in The CBS system To be charged manually (Concession

NON CASH TRANSACTIONS


[Rs.0.50/1000] ;

Min-Rs.25; Max-Rs3000

Outstation Cheque collection Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges.

50% of normal charges

available only in home branch) To be charged manually

Intra city free


Inter city- 50% of normal charges

Charges set in the CBS system

2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

(Re.0.75/Rs.1000) Min Rs.25/- MaxRs.1250

Issue charge free Tr. Charge - free

Available
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued) Free Free Free Free Free NA Free in the name of the firm/corporate Free in the name of the firm/corporate Silver & Gold salary Accounts for all Employees of the firm

Category Name Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months

Current account POWER SUPER 5095-2411 CA-POWER SUPER-PUB OTH-ALLINR


Rs.75,000/Rs.5,000/- per quarter Rs.900/-

Remarks

Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.10lacs free per month, Cash deposit in Home Branch For amount above Rs.10lacs @ Rs.25/per lac or part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

75% of normal charges [0.15% of amt deposited; Min Rs.25/- + normal Cash handling applicable] Unlimited -Free 75% of normal charges. (Re 1.50/1000) Min Rs.25/-

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs.0.75/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection

Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/per instrument above 10

Rs.1,00,000/ -:Rs.150 per instrument Charges set in the CBS system

Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility

Intra cityFree
Inter city- 75% of normal charges (Re1.125/Rs.1000) Min Rs.25/- MaxRs.1250

Issue charge free Transaction charges Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)

Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

Available
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued) Flat Rs.25/- per transaction Free Normal Charges Normal Charges Rs.1.00 per cheque leaf other conditions to remain NA Free in the name of the firm/corporate Free in the name of the firm/corporate NA

11

Category Name Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months Cash deposit in Home Branch

Current account POWER LITE 5095-2421 CA-POWER LITE-PUB OTH-ALL-INR


Rs.40,000/Rs.4,000/- per quarter Rs.800/-

Remarks

Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.6 lacs free per month, For amount above Rs.6 lacs @ Rs.25/per lac or part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

80% of normal charges [0.16% of amt deposited; Min Rs.25/- + normal Cash handling applicable] Unlimited -Free 80% of normal charges. (Re 1.60/1000) Min Rs.25/-

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs1.00/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection

Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/per instrument above Rs.1,00,000/ -:Rs.150 per instrument

12

Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account Multicity cheque facility

Intra cityFree
Inter city- 80% of normal charges (Re1.2/Rs.1000) Min Rs.25/- MaxRs.1250

Charges set in the CBS system

Issue charge free Transaction charges Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)

Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

Available
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued) Flat Rs.25/- per transaction Free Normal Charges Normal Charges Rs.1.00 per cheque leaf other conditions to remain NA Free in the name of the firm/corporate Free in the name of the firm/corporate NA

Category Name
13

Current account POWER BASE

Remarks

Product code Product description QAB (Quarterly Average Balance) Penalty for non maintenance of QAB Penalty for closing account within 12 months

5095-2401 CA-POWER BASE-PUB OTH-ALL-INR


Rs.20,000/Rs.3,000/- per quarter Rs.750/Charges set in theCBS system

--do---do--

CASH TRANSACTIONS Upto Rs.4 lacs free per month, Cash deposit in Home Branch For amount above Rs.4 lacs @ Rs.25/per lac or part thereof

Cash deposit in Non-home Branch Max limit: Rs.2,00,000/- per day Branch Manager of the non home branch is vested with the discretion to accept more cash. Limit to be checked manually Cash withdrawal in Home Branch Cash withdrawal in Non-home Branch Max Rs. 1 lac per cheque only by account Holder permitted only from credit balances. Limit to be checked manually Drafts/Bankers cheque

90% of normal charges [0.18% of amt deposited; Min Rs.25/- + normal Cash handling applicable] Unlimited -Free 90% of normal charges. (Re 1.80/1000) Min Rs.25/-

Charges set in the CBS system. Customers will be charged at the end of month based on the amount of transactions Charges with Rebate set in The CBS system

Non home Charges with Rebate set in The CBS system To be charged manually (Concession available only in home branch) To be charged manually

NON CASH TRANSACTIONS


[Rs1.25/1000] ; Min-Rs.25; Max-Rs3000

Outstation Cheque collection

Normal charges:(a) Upto Rs.10,000/- :Rs.50/- per instrument; b)Rs.10,000/- to Rs.1,00,000/ -:Rs.100/per instrument above Rs.1,00,000/ -:Rs.150 per instrument

Inter-core transactions 1.Cheques drawn on Non home branches collected at home branch will be charged as per outstation collection charges. 2.When funds are transferred from other accounts to a Power account, remitter's account will be charged with charges applicable to the remitter's account 14

Intra city free


Inter city- 90% of normal charges (Re1.35/Rs.1000) Min Rs.25/- MaxRs.1250

Charges set in the CBS system

Multicity cheque facility

Issue charge free Transaction charges Rs.25 per cheque upto Rs.5lacs; Rs.50 per ch. For amounts above Rs. 5 lac (normal charges)

Corporate Internet Banking ATM cum debit card RTGS NEFT Standing Instructions Issue of duplicate statements Issue of cheque books (Other than Multicity cheques) Car Loans Demat services eZ trade Salary accounts

Available
Domestic card with withdrawal limit of Rs.40,000 per day(Power Gain card to be issued) Normal Charges Normal Charges Normal Charges Normal Charges Rs.2.00 per cheque leaf other conditions to remain NA NA NA NA

RATIONALE: Foray of Private Sector and Foreign Banks with innovative products in the SME sector. Novel liability products and services are being introduced for providing value addition to customers. To incentivize customers for keeping high balances in their accounts. As current accounts are an important source of interest free funds for banks. Made to order current account products Customers can choose a facility based on a QAB where they get the optimum advantage. The products have Best in Class features compared to competitors products.

SAHAJ CURRENT ACCOUNT


Category Name Target Group CURRENT ACCOUNT SBI-SME SAHAJ Individuals/Proprietorship Firms/ Partnership Firms/ engaged in any business activity To provide basic banking facility to the low profile business community
15

Purpose

Minimum Deposit Product code Branches which can open this account Cheque Book facility

Cash withdrawals

Limits for Cash Remittance Per Day Facilities Offered

Rs.1000/- (No OD will be permitted in the account) 5040 2401 All branches where ATM and internet Banking facilities are available Number of cheque leaves to be issued per financial year to be restricted to 25 leaves with a charge of Rs. 5 per leaf Additional requirement of further cheque leaves may be permitted with a charge of Rs.10 per leaf. Drawings per cheque is limited to Rs.15,000/- Each cheque leaf to carry this inscription. The account holder may withdraw cash up to permissible limit of Rs.15,000/- through ATM facility. No cash withdrawal is permitted at the cash counter of the Branch. For payment to merchant establishments, the account holder may use the debit card, internet banking, cheque book or by means of draft. The account holder is permitted to remit Cash to the extent of Rs.10,000/on any one ATM cum Debit Card facility Free Internet Banking Facility Transfer of Funds to other accounts at the branch free of charge Standing Instructions for payment of loan installments at the branch free of charge. Standing Instructions for payment to other accounts for a fee of Rs.50/per transaction. ECS facilities available at select branches for payment of telephone bills, Insurance Premia at applicable charges. Immediate credit of outstation Cheques up to maximum amount of Rs.15,000/- per cheque.
16

Penalty for non maintenance of minimum balance Documents Required

Collection of outstation cheques at normal charges Transaction of Inward Bill business at normal charges Rs.300/- per quarter Two Photographs. Copy of Partnership Deed / Copy of Certificate of Registration under Shop & Establishment Act as applicable. Introduction by an Account holder Terms and conditions such as adherence to KYC procedure obtention of photograph/IT PAN/Form 16 sending of letter of thanks, classification of dormant/inoperative account, as applicable to ordinary current account will be applicable.

Others

RATIONALE: To make financial inclusion of SME entrepreneurs like cottage industry units, traders, petty shop-keepers, hawkers, vendors, autorickshaw and other small transport operators etc. who have small means are not able to have account with the Bank. Such SME units need transaction accounts to accumulate their daily surpluses, make statutory/utility payments like taxes, phone bills, insurance premium, electricity bills etc. To enable recovery of installments on the loan given on repayment basis. To maintain accounts distinctly by this segment from their personal holdings.

17

POWER JYOTI CURRENT ACCOUNT


Category Name Purpose CURRENT ACCOUNT POWER JYOTI To provide collection facility for institutions through our core banking branches (i) Usual fee collection for educational Institutions (ii) Competitive examination fee collection (iii) Donor collections for charitable organisations (can be customised as per client needs) 5091-2401 Rs. 25,000/Rs. 1000 per quarter Rs. 500 Cash, transfer and clearing Batch and trickle feed transactions not supported No Overdraft is permissible The institution (a/c holder) is not charged for fee collection. A commission of Rs.50/- may be collected from the remitter separately (manually) and may be credited to their (non home branch) commission account. CGM of the Circle, where account is maintained, has the discretion to reduce the commission upto Rs.20 per challan. Waived Transactions other than fee collection/donation not permitted Cheque book facility not available. The Institution can transfer the required balance through authorization/sweep Available - free All Branches Specific three part challan to be used for remitting fees. One copy to be kept with the Branch and the other two to be given to
18

Product code Quarterly Average Balance (QAB) Penalty for non-maintenance of QAB Penalty for closing the account within 12 months Permitted type of Transactions Transactions not supported OD Facility Charges for transaction

Cash handling charges Transactions not permitted

Cheque book facility

Corporate Internet Banking Facility Branches which can open this account Method of collection at the receiving branch

remitter (after realization if remitted through clearing instrument). The challans to be filled up and submitted to the Branch by the student/remitter. The Institutions can arrange for challans with account number and all the required details, either printed or downloaded from Institutions website. Collecting branches to feed all the relevant particulars in the challan while receiving the fee and to collect the charges separately as per instructions given in the challan format Once the Power Jyoti account is opened with 5091- 2401 as the product code from the Core Option, second tab appearing on the top of the screen Statement/Mail option /Fee collection is to be chosen to activate the fee collection module for the product. Under fee collection header field Receipt type the appropriate option (School fee, Competitive Examination Fee/Brokers etc) is to be chosen according to the requirement of the customer. Once appropriate option is chosen and activated, Power Jyoti can be used for opted facility, and the corresponding screen will be accessible for posting the details of challan Those accounts which are already been opened without activating Fee option or others, the option can be activated through Amend option. (Main Menu Deposit CC/OD Accounts and Services Amend Amend Deposit tabbed screen) Usual fee collection for Educational Institutions Any type of fees like School/college/university fee, can be collected through any of our CBS Branch. Different types of fees (upto 10 items) can be collected through a single challan. The classification for the 10 fee fields in the challan are from A to J. Institutions to be advised to print their challans grouping the fees into these ten categories with the alphabets (A to J) printed as the group heading so that there is no overlapping of fees in the same field at the time of remittance of fees at the branch. Users (Single Window Operators) at the front end of
19

Activation of fee collection module

Facilities/features

the Branch need to capture the fee break up against the field provided for the alphabet. There is also a validation for the break up with the total amount already put through. The functionality has a provision to capture 17 digit alpha-numeric number as the reference no. The enrolment no. or Reference No., if coded suitably to indicate the Course, year of study, term of the fees and specific identifier no. of the student, will help the Institution to reconcile the entries with other details captured by the users. Account No., name of the Institution, Journal No. and amount of remittance will appear in the fields . ID/Ref. No, name of the student, Application/Challan No. and Course/Class name are mandatory and to be entered by the User. The additional details captured would be given to the home branch of the account and in turn to the institution, in extract containing Trxn Branch code, Date of trxn., journal No., Total, ID/Ref. No. (17 AN Character), Name of the Student , Application /Challan No., Class/ Course and the breakup of A to J in the same order. Competitive examination fee collection o Any type of fees for competitive examination, recruitment drive etc can be collected through any of our CBS branches. o The functionality has a provision to capture 17 digit alpha-numeric number as the Registration ID/Ref No. and the Name of applicant. Both field are mandatory and has to be entered by the user at the Branch. o The details captured is available to the Institution through statements/CINB, which will help the Institution to reconcile the entries o This facility can be customised and can be offered for various collection purposes. Necessary challans may be devised and advised to the customer by the Branch. General A Journal number will be generated by the System. Journal No. (Host Trace Number) would be
20

Documents Required

Power Jyoti for Brokers

entered in the challan copy given to the remitter. This number will be appearing in the statement, and also can be viewed by the Institution through statement/CINB. The Institution can also view the Remitting Branch Code, Journal No., Reference No. and Name of the student/applicant through CINB. Usual procedure for opening institution accounts to be followed Terms and conditions such as adherence to the KYC procedure, obtaining photograph (wherever necessary) / IT PAN / Form 60 sending of letter of thanks, as applicable to ordinary current account will be applicable. The Power Jyoti accounts for the brokers will be opened at Capital Market Branch, Mumbai. Branches and franchisees of the broking firms from other centers will bring local cheques for credit for these accounts (outstation cheques are not to be accepted), with a special challan form. The salient element of the account is to provide Cheque collection facility for broking houses at various centers, with assured MIS as per the format required by them. The product has been configured to capture the required MIS and offer the same to broking houses through statement of accounts, CINB and other media.

RATIONALE: Product designed for Institutions, charitable organizations etc., using the generic fee collection functionality developed by our IT Department, for collection purpose Account holders can also get the MIS through internet banking (CINB) on a real time basis. The product can be customized and offered to customers for competitive examination fee collection, donor collections etc.

21

SURABHI DEPOSIT SCHEME


Category Name Purpose SAVINGS & CURRENT ACCOUNT SURABHI To Provide a scheme with option for sweep and reverse sweep to meet the requirements of trusts and other organizations that have cash accruals needing safe investment options. Corporates / Institutions / Trusts / Small & Medium Enterprises who manages the P F / any other trust account of their employees. Savings & Current Account linked to Corporate Liquid Term Deposit. The nature of deposits such as Term Deposit / Special Term Deposit to be incorporated in the application form. SB - 1088 2401 CA 5088 2401 Minimum 12 months Maximum 36 months The period of deposit to be fixed by the depositor initially and the same is incorporated in the application form. For Current Account Rs.10,000/For Savings Account Rs.1,000/The balances in the Savings / Current account will be transferred automatically by means of auto sweep facility to term deposit / special deposit account on a weekly basis, whenever there are surplus funds in the account. The tenure of deposits will be decided by the depositor at the time of opening the account. The threshold limit in the operation account to be maintained will be at Rs.50000/-. (The excess amount over and above the said balance will be transferred to Term Deposit Account). In case of inadequate balance in the savings/ current account for payment of a cheque, the shortfall amount is broken from the fixed deposit, in multiples of Rs.1000, and the cheque is honoured, without any hassle to the customer through reverse sweep facility. The business rule of LIFO Last in First Out will be followed. A mandate for transfer of funds from current/
22

Eligibility

Nature of Deposit

Product code Period for Term Deposit

Minimum Amount of deposit to be maintained Operation of the Account

Rate of Interest of Term Deposit

Loan Facility Branches which can open this account. Documents Required

savings account to fixed deposit and for withdrawal from fixed deposit through auto sweep and reverse sweep to be obtained from the depositor at the time of opening the account and kept on record. Deposits broken through reverse sweep will be paid interest as per the card rates for such period applicable as at the date of opening of such deposits with penalty as applicable for premature withdrawal. As applicable for Term Deposit for the tenure the deposit is contracted. No differential rate of interest is applicable. No Overdraft / Loan facility is permissible All Branches. Two Photographs of each of the persons authorized to operate the account. Copy of Partnership Deed / Copy of Certificate of Registration under Shop & Establishment Act/ Copy of Memorandum & Articles of Association as applicable/ Copy of Trust Deeds / Copy of Resolution for maintaining account with the Bank. The documents should be verified with the original by an officer of the Bank. Introduction by an Account holder. Terms and conditions such as adherence to the KYC procedure, obtention of photograph / IT PAN / Form 60 sending of letter of thanks, as applicable to Savings / Current account will be applicable.

Others

RATIONALE: To cater to that section of non-individual customers who have surplus funds for investments, but at the same time need the convenience of liquidity. It provides value addition to the top Corporates / Institutions Accounts under SURABHI Scheme are SB/Current accounts with auto sweep and reverse sweep facility. Unfixed deposits

23

CIRCULAR REFERENCES:
Product Sl. No

Circular No & date


SME/L&TP/Circular No.04/2006-07 dated 06.06.2006 SME/L&TP/Circular No.19/2006-07 dated 31.10.2006 SME/L&TP/Circular No.30/2006-07 dated 03.03.2007 SME/L&TP/Circular No.08/2007-08 dated 19.02.2008 SME/L&TP/Circular No.24/2007-08 dated 10.03.2008 SME/L&TP/Circular No.27/2008-09 dated 15.10.2008 SME/L&TP/Circular No.34/2008-09 dated 03.11.2008 /SME/-POWER CA/33/2010 - 11 July 17,2010. SME/L&TP/Circular No.07/2009-10 dated 13.05.2009 SME/L&TP/Circular No.09/2006-07 dated 01.08.2006 SME/L&TP/Circular No.09/2007-08 dated 07.07.2008 SME/L&TP/Circular No.13/2008-09 dated 14.03.2009 SME/L&TP/Circular No.60/2008-09 dated 14.03.2009 SME/L&TP/Circular No.02/2009-10 dated 08.04.2009 SME/L&TP/Circular No.07/2007-08 dated 14.08.2007

eCircular No
104/2006-07 392/2006-07 680/2006-07 673/2007-08 722/2007-08 406/2008-09 462/2008-09

SME Current Accounts

1 2 3 4 5 6 7 8

SBI Shakti Current Account Sahaj Current Account

1 1 2

115/2009-10

239/2006-07 672/2007-08 192/2008-09 733/2008-09 64/2009-10 287/2007-08

Power Jyoti Current Account

1 2 3

Surabhi Deposit Account

Note: Circulars issued upto 31.01.2011 have been included

24

MULTI CITY CHEQUES FOR SME CUSTOMERS


1. GENERAL A Multi-City Cheque(MCC) is one that can be written by the customer in favour of his client and payable at par at all Core Banking branches of the Bank. The payee can present the cheque directly at any Core Banking branch or in clearing through his banker. MCCs can be issued by any branch. MCCs are payable at par at all branches. MCCs can be issued in existing/new SB, CA and CC accounts, in addition to normal cheque books. Personalized cheque books with customer details are issued to customers. The MCC facility is available to the Customer, only through the prescribed cheque leaf issued for the purpose. The specimen signature of the customer / authorized signatories of the account along with the mandate must be made available in the central database in CBS so that the same can be verified by the paying branch. Issuing branches should update signatures / mandate in Core Banking whenever the same is modified by the account holder(s). The MCC facility is to be used only for genuine transactions / bonafide remittances. The customer shall return all unused cheque leafs to the branch, before closure of account or on discontinuation of the MCC facility
Branches should update all the particulars of account in the system before indenting for MCCs, as the particulars available in the system will be printed on the cheque book via straight

through processing. 2. ELIGIBILITY CRITERIA FOR ISSUE OF MCCs 2.1 Branches 2.2 Customers

All branches are enabled to issue MCCs

MCCs may be issued to customers who have opened accounts under SME Power Gain Current Account and SME Power Pack Current Account. In other cases, including borrowal accounts, Branch Manager can take a decision to extend the facility based on satisfactory operations in the accounts. Application cum acceptance letter (appended at Annexure) to be obtained from customers. The charges applicable for issuance of MCC should be explained to the customers before enlisting their names. 3. UPPER LIMIT FOR SME customers Can issue MCC for a maximum ISSUE OF MCCS amount of Rs. 10 lacs
25

4. PROCEDURE FOR Branches can indent for MCCs to the LCPC linked to ISSUING MCCs them. CBS Menus are to be used for indenting cheque book issue request from customers. The cheque books will be directly despatched by LCPC to the customer. 5. CHARGES FOR MCCs 5.1 Issue charges : Rs. 3 per cheque leaf Free for Power Pack CAs Issue charges will be debited to customers account by the system. Cheque amount upto Rs. 5 lacs Rs. 25 per cheque Cheque amount above Rs. 5 lacs to Rs. 10 lacs - Rs. 50 per cheque Free for Power Pack CAs Transaction charges will be credited to the income account of paying branch by debit to drawers account by the System.

5.2 Transaction (payment charges)

6. MCC PAYMENTS 6.1 Cash payments at other centers 6.2 Guidelines for paying branches for payment of MCCs. No cash payments allowed at non home branches for SME customers. All branches are designated to pay MCCs when presented to them. Service branch is the designated branch to make payment of MCCs received through clearing. The MCC paying branch will use the CBS platform for verification of balance, signature(s), mandate and post the cheques by direct debit to the respective accounts. They may return the cheques for reasons such as insufficient balance or signatures not tallying etc. MCCs drawn on borrowal accounts may be paid based on the availability of drawing power, if otherwise in order. Paying Branch should not override the DP of loan account holders while paying MCC, under any circumstances. Paying branch should key in the complete name of payee while paying MCC so that name of payee will appear in MCC report at home branch.

26

Annexur e Multicity cheques Application-cum acceptance letter The Branch Manager, State Bank of India, ______________Branch, Dear Sir, Multi City Cheque (MCC) Facility Savings Bank /Current /Cash Credit account No.__________________________ I / we request you to arrange for extending Multi City Cheque (MCC) facility for my/our above mentioned account maintained with you. I / we have gone through the terms and conditions for extending the MCC facility, as given below and accept the same. Terms & Conditions: 1. The Multi City Cheque (MCC) is payable at any branch of State Bank of India (SBI). 2. The MCC facility is to be used only for bonafide transactions/ purposes. 3. No cash payments will be made on Multi City Cheques 4. Payment of MCC will be made only through the cheque leaf issued for the same and if it is in order, subject to availability of clear balance/ funds / drawing power in the account and signature of drawer(s) tallies with the mandate & signature(s) available in the Core Banking System (CBS). 5. The service charges for issue / payment / return / stop payment instructions in respect of MCCs, as fixed by the Bank, are payable from the respective account from time to time. SBI may change / modify the service charges associated with MCC facility periodically. Applicable charges can be ascertained from the Banks website and also from the branches. 6. The Bank has the sole discretion to decide to provide / continue/ terminate the facility or reject the request for MCC facility at any point of time without assigning any reason whatsoever. 7. The accountholder(s) will indemnify the Bank against any third party claims, loss or damages caused to the Bank due to his/ her/ their negligence or fraud by any third party in respect of MCC facility granted. 8. All unused cheque leaves will have to be returned to the branch, before closure of account or on discontinuation of the MCC facility. 9. The Bank shall not be responsible on account of failure to make payment of MCC because of reasons beyond the control of the Bank such as technical snags, communication breakdown etc. 10. The Bank shall have no obligations to any third party including any beneficiary other than the account holder for the execution of any MCC payment instruction. Yours faithfully,

Date :

Signature of Account holder (s)

27

INTER CORE TRANSACTIONS


We are offering concessions on inter-core transactions for various Power Current Account clients. To give better value to those customers who can be rated higher in their relationship with us, We are offering concessions based on a customer rating grid, as given here below to be used for offering 25%, 50% or 75% concessions in inter-core transactions. CBS has the facility of parameterising concessions as a percentage of the standard charges, customer-wise or account-wise. The method of levying charges are spelt out in the various Power Current Accounts schemes discussed in the foregoing pages. Customer rating grid SME & MCG Accounts FB limits Int. rate on limits Exchange & Commision income Liability connection Cross Selling Value of connection grid Parameter Score Parameter > 25 crores 5 >10 crores >PLR 5 PLR

Score 3 3

Parameter Score >1 crore 1 1% below 1 PLR > 5 lacs 1

>25 lacs

>15 lacs

Avg CASA >50 lacs Salary a/c>250 Insurance cross sell Commission >1 lac

Bulk >25 cr

>100 cr

MF investment >25 cr Tie up for personal loan to staff

Channel Finance > 25 cr SME car loan >1 cr

Total points that can be scored = 50 Total points scored > 25 - upto 75% concession in Core power charges Total points scored > 15 - upto 50% concession in Core power charges Total points scored > 08 - upto 25% concession in Core power charges Exchange + Commission income, Liability value, insurance cross sell value, MF investment, relate to the past financial year.

28

BUSINESS TO BUSINESS PAYMENT SOLUTION


We have a widespread network of branches as also a very strong base of alternative channels like ATMs, robust Internet Banking portal, etc. There is a great demand from large Corporates., who have dealership and agency networks to have a sound platform for B2B payments. In this context, we have engaged FSS Ltd, who have developed an IT based solution for B2B payment that provides online funds transfer as well as MIS to all the parties involved i.e., the Corporates, the dealers and the Bank. The salient features of the solution are placed below: The solution can be operated on multiple channels like ATM, Internet, Point of Sales Machines (POS), Mobile phones and through Letter of Authority. Creates a virtual Closed User Group of the large Corporate and their dealer network. The accounts are pre-defined by the account holders and linked in advance. Funds transfer can be effected by the dealers using multiple options, such as, ATM, Internet, POS, Mobile phones. We are presently offering it through ATM channel. We will offer it through debit card payment gateway in Internet and Letter of Authority in future. Other options like POS, Mobile banking etc. will be offered as and when we have addressed security aspects. The dealer/ agents, who desire to have this facility, will have to open Current Accounts with the branches in their area of operation. They will be provided with debit card facility. The accounts will be mapped through a registration process to be initiated by the dealers/ agents. Subject to balance being available in such accounts, dealers/agents can transfer funds using ATMs. The back end software and services of FSS will recognize successful transactions and upload the MIS on a real time basis to the database of the Corporate. This will enable simultaneous release of goods/services by the Corporate to the agent/dealer. The solution also provides functionality for the Corporate to give a file containing agent-wise list of debits to be raised. The software will enable a designated officer of the Bank to authorize such debits based on the letters of authority obtained from the agents. Successful debits will update the MIS in the Corporates system. Dealers and agents having multiple dealerships would be encouraged to open dedicated Current Accounts for each of their agencies, to avoid any errors in transfer of funds to the right account. Fund settlement with the Corporate will be done on T+1 day basis after reconciliation with the MIS to be provided by FSS. Corporates shall bear the cost of funds transfer, to be paid at monthly intervals at the branch where they maintain the principal account 3. We have started the solution with Airtel and Reliance and plan to extend it to more corporates. The documents required in opening the account of the dealers / agents of the corporates and other terms are placed in Annexure I & II. Steps have to be
29

taken for opening current account of the dealers / agents of the Corporates after fulfilling KYC norms. The details of number of accounts opened may be advised to this office at monthly intervals for our information and record. Dealers can also open Sahaj current account with a minimum balance of Rs.1000/Opening in a central place It has been decided that the Current Accounts under the captioned solution will be opened in a centralized location, identified by the Circle.

30

Annexur e-I Process flow for opening of accounts of dealers at a central place Corporate will arrange to collect application forms from all dealers together with enclosures as per the checklist already provided to them. Corporate will also furnish a letter certifying that all the accounts are of their authorised dealers and that the information furnished are correct to the best of their knowledge. Corporate will also provide with a soft copy of account details of all accounts to be opened in excel form conforming to the bulk opening format of the Bank. These accounts will be opened at a single branch, through bulk account opening option. Signature of authorised signatories will be scanned and uploaded in the system centrally. Account opening forms with other enclosures will be sent to the Home Branch by courier immediately. Along with this, Circle will also send a copy of the B toB circular issued by them for ready reference for the branches concerned. At the same centre, file will be uploaded for all the accounts for issue of Powergain ATM Cards. These accounts will then be changed for their home branch to the branches against which the dealers have been mapped already. Corporate will be advised of all the account numbers of the dealers with home branch names. The dealers will have to visit the home branches concerned. Branch officials will sign the KYC verification portion of the account opening form after brief interaction with the dealer. Dealers would make the initial deposit into the accounts. Home Branch concerned will verify the signature of authorised signatories and issue them with necessary cheque books. Powergain ATM cards will be delivered directly to the dealers at the address specified. ATM PIN will be sent to the Home Branches indicated in the account. Authorised signatories of the dealers will have to call on the home branch and collect the PIN. The above process will ensure that dealer accounts are opened quickly without much loss of time, the correct type of ATM cards are applied for and that the Branches become familiar with the B toB Scheme as well. In respect of all dealers who already have an operative current account, corporate will advise us with the names of dealers, account number and the Branch where the accounts are maintained. We will advise these branches to upload necessary Powergain ATM cards for such accounts.

31

Annexur e-II CHECKLIST FOR BRANCHES Current Account to be opened SME Power Pack SME Power Gain SME Power Premium SME Power Privilege SME Power Advantage SME Sahaj Normal Current Account To be opened under C&I or SIB segment (option to choose is with the customer) Individual / Proprietary firm / Partnership firm / Private Limited Company. Photo Identity Card issued by Government Department in case of individual & proprietor of the proprietary firms. Photographs of all and authorised signatory of the firm/company. Documents such as telephone bill/ electricity bill, establishing the address of office / place of work. Registration Certificate (shop & Establishment Act, Corporation/ Municipality/Panchayat etc.) from the competent authority to be obtained. Letter of appointment issued by the corporate to the dealer [All KYC norms for opening the accounts to be complied with] As stipulated in the respective current account opened by the dealer May be issued if requested Powergain (under SME) will be issued To be made available free of charge Upto Rs.1 lakh Nil Above Rs.1 lakh- Rs.50 per lakh No charges to be recovered from the dealer/ distributor Letter of authority empowering debit by authorised official of the corporate as per specimen to be obtained, signature of the person to be tallied with the SS on record. Signature on such letter of authority to be in tune with the operating instruction applicable for the account (single or jointly as per the authority structure).
SBI COLLECT MANDATE 32

Account in the name of Documents required

Minimum Balance Cheque Book Issue ATM Card Internet Banking Cash handling charges (per day) Charges for transfer of funds to corporates principal account Letter of debit authority

Date: The Branch Manager, State Bank of India , __________________________Branch Dear Sir, I hereby instruct you to pay (name of corporate) by debit to my account number__________________with such amounts as may be requested by (name of corporate) from time to time not exceeding Rs._________(Rs.___________ _______________________) at any one instance. I confirm that the amounts to be debited from the aforesaid account are variable and may be debited as per the request of (name of corporate) received by you in any form. Whatever amounts so transferred/ debited/deducted by you from my aforesaid account pursuant to the request of (name of corporate) shall be final and binding on me, and I will not dispute the same. I will not revoke or cancel this mandate without giving prior written notice of not less than 30 days to the Bank and (name of corporate)

Signature of Customer __________________ Name of customer: ______________________ DETAILS TO BE FILLED UP AND VERIFIED BY THE BANK Name of the Account Holder: Account Number: Account Type: Name of the Branch: Branch Code: Certified that the signature has been verified and that the particulars furnished above are correct as per our records. ____________________ Banks Stamp Signature of the Authorised Official from the Bank Specimen Signature Number Name:____________________________

PRODUCT

S No

Circular No & Date

e-Circular No

Multicity cheques

SME/L&TP/Cir No. 24/06-07 dated 18.01.2007


33

563/2006-07

Inter-core transactions

SME/L&TP/Cir No. 29/200607 dated 27.02.2007 SME/L&TP/Cir No. 11/200708 dated 29.08.2008

653/2006-07

310/2007-08

B 2 B PAYMENT SOLUTION

1 2

4 5

SME/L&TP/Cir No. 24/2006- 9/2007-08 07 dated 18.01.2007 SME/L&TP/Cir No. 521/2007-08 237/2006-07 dated 26.11.2007 SME/L&TP/Cir No. 674/2007-08 330/2006-07 dated 16.02.2008 SME/L&TP/8 dated 10.4.08 addressed to Ahmedabad,
Bhopal, Bhubaneswar, Chandigarh, Chennai,, Hyderabad, Kolkata, Mumbai & Kerala circles.

SME/L&TP/Cir No. 18/200809 dated 01.09.2008

310/2008-09

Note: All circulars issued upto 31.01.2011 have been included

34

SME SMART SCORE


1. Target Group Individually managed proprietary/partnership firm or closely held public/private limited companies in the Small and medium industrial and trading sector under C&I and SIB segments. The chief promoter /chief executive should be 18 to 65 years of age The applicant must obtain a minimum overall score of 60% with a minimum of 50% under each sub-head like Personal details, Business details and collateral details (except in cases where collateral should be asked as per Bank's norms, where the minimum marks will be nil). Working Capital needs Acquisition of fixed assets Cash Credit / Term Loan Manufacturing UNITS Rs.5lacs to below Rs.50lacs {20% of annual turnover for WC loan and 67% of project cost for TL} TRADE & SERVICES Rs.5lacs to Rs.25lacs {15% of annual turnover for WC and 67% of project cost for TL}. For FB and NFB single exposure limits may be sanctioned to the units. NFB facilities can be sanctioned on the best judgement basis within the discretionary powers delegated to sanctioning authority. 6. 7. Margin Rate of Interest 25% for working capital component and 33% for TL component. Size of Credit Limit Repayable on Repayable in 3 years Demand or upto 3 and above (% p.a.) years (% p.a.) Above Rs. 5 lacs but @SBAR 0.75% above SBAR below Rs.25 lacs Rs.25 lacs and above 0.50% above SBAR 1.25% above SBAR but upto Rs.50 lacs Hypothecation of stocks and assets financed by Bank As per Bank's extant norms for WC and TLs As applicable to SSI /SBF / C&I units WC loan to be reviewed annually and renewed once in two years. TL not more than 5years excluding moratorium not exceeding 6months As per simplified SME documentation A simplified appraisal model (enclosed) has been developed to
35

2.

Eligibility *

3. 4. 5.

Purpose Type of facilities Quantum of Finance

8.

Security: - Primary - Collateral 9. Processing fees 10. Repayment

11. Documentation 12. Special

features

standardise the appraisal process. A special application form has been designed to capture all the required information at one instance.

*Override: Units that are not able to score 60% or more marks in the scoring model will not qualify for consideration under SME Smart Score Scheme. However, such loans not approved under SME Smart Score Scheme can still be considered by the Branches under the normal credit dispensation based on specific considerations.

Product Highlights: This product is designed to avoid delays in credit delivery due to cumbersome assessment processes. A simple scoring model has been designed for which all the data required has to be furnished at one go by way of an application form which has also been specially designed for this product. Units which score a minimum of 60% are eligible for this product. This product can be given to units in C&I, SSI and SBF segments for credit requirements between Rs.5 lacs to Rs.50 lacs( Rs.25lacs for T&S) based on the projected turnover and / or project cost. The loan quantum should be a minimum of 20% of turnover and/or, 67% of project cost. If a proposal does not fit into this model, it can also be considered on usual Bank's terms on merits.

Marketing tips: This product is especially useful in Trade advances and small industries All SMEs especially those which are individually managed proprietary concerns/ partnerships / private limited companies are the target group. FAQs How to arrive at the quantum of loan for units engaged in trade for working capital purposes? While SSI units qualify for a limit of 20% of their projected annual turnover (Nayak Committee norms), the trading units may be extended a working capital limit of 15 % of their projected annual turnover subject to a maximum of 25% increase in the projections over the turnover of the previous year.

SME SMART SCORE LOAN APPLICATION FORM

The SME Smart Score is available ONLY if the answers to all the following questions are

36

Yes 1. Whether the chief promoter / Chief executive is between 18 and 65 years of age? 2. Whether the promoters are not defaulters to the banks/ financial institutions. 3. Whether all the clearances including but not limited to environmental clearance for the project has been obtained / satisfactory evidence of their being made available will be provided? 4. Whether the promoters being to the area of operation of the branch and have satisfactory references?

37

SME SMART SCORE LOAN APPLICATION FORM


Please fill up this form only if the answers to all the following questions are YES
1. 2. 3. 4. Whether the chief promoter / Chief executive is between 18 and 65 years of age Whether the promoters are not defaulters to the banks/ financial institutions Whether all clearances for the project have been obtained Whether the promoters belong to the area of operation of the branch and have satisfactory references?

General : Name of the Company / Firm Address (Off) :(If factory and office are having different Addresses, Give the Address Nearest to the branch First) Plot/Building/Plat Name and Number Street Name Post Office City Telephone No (with Pincode) Fax Address(Factory): Plot/Building/Plat Name and Number Street Name Post Office City Telephone No (with Pincode) Fax

Loan Applied for Purpose of the Loan When and how the loan will be repaid?

38

PERSONAL DETAILS OF THE CHIEF PROMOTER / CHIEF EXECUTIVE


Name of the Chief / Promoter / Chief Executive Residential Address Plot/Building/Flat Name and Number Street Name Post Office Post Office Pin code Telephone No Fax What is your Date of Birth ? Let us know about your family Are you married What is your spouses occupation? How many children do you have? Your house Owned Rented What is your academic qualification? Is it related to your line of trade? Yes / No

Are you assessed for Income-Tax?

YES/NO If yes, PAN No.

Your Account Number/ How long are you having deposit account with SBI? What would be the minimum balance in the account? Do you have a life insurance policy?

I certify that all information furnished by me / us is true, correct and complete. I have no borrowing arrangement for the company / firm with any bank except as indicated in the application form. There are no over dues / statutory dues by me or the firm / company. No legal action has been taken against me / firm / company. I shall furnish all other information that may be required by Bank in connection with my application. The Information may also be exchanged by you with any agency you may deem fit you, your representative of any other agencies as authorized by you may at any time inspect / verify my / our assets, books of account etc. in our factory business premise as given above. You may take appropriate safeguards / action for recovery of banks dues including publication of defaulters name in website/ submission to RBI. I further agree that my loan shall be governed by the rules of
39

State Bank of India as may be in force from time to time. Place Executive Date Signature of Chief Promoter / Chief

BUSINESS DETAILS Year of commencement of business State the profit / loss for the last 3 financial years YEAR I YEAR II YEAR III

State the sales turnover for the last 3 financial years : YEAR I Tell about your factory premises Tell about your factory premises How do you plan to produce it? YEAR II Owned Rented YEAR III Leased for over 5 years

Does the product require special know-how? If so, are you in possession of the know-how?

Whether your line of activity falls under priority sector?

40

What are raw materials required? How do you plan to produce them? Are they available on credit? If so what are the terms of credit?

How do you plan to ensure the quality of your product? Any special steps being taken?

What about utilities like water, power etc. Please describe the requirements and how are they met?

Whether you need skilled labour? Please describe your plans for sourcing and employing skilled labour?

Any special reason to locate your business at the present location? Is there any advantage in procuring the raw materials locally? Is the local market enough to sell the finished product of your firm? Any other advantage?

Manufacturing process in brief

What the level of competition for the product? How do you plan to meet the competition?

Give the total outside liabilities for the last 3 years and your tangible networth.

41

PARAMETER Total outside liabilities Tangible networth


(including loans from friends and relatives)

YEAR I

YEAR II

YEAR III

TOL / TNW

What is the quality of your receivables? How many months sales do they represent? Can you give an age profile of your receivables? Age Less than 1 months old 1 to 2 months old 2 to 3 months old More than 3 months old Total percentage What is the quality of your finished goods inventory? Are they sold against order as and when produced? 100% Amount Percentage to total

Are they kept in stock for long?

How many months sales do they represent?

What will be the time period between procurement of raw materials to realization of sale proceeds?

42

Can you cut short the cycle without increasing your liability?

Give the details of cost and the means of finance for your project Item Why do you need to purchase the item? What is the basis of your cost Cost of the item How do you proposed to acquire/ procure the item

Land Building Machinery

Others

Total cost

What are the means of finance? Means From own sources Bank loan Friends and relatives Others Total *Bank should be satisfied about your ability to bring in the margin. Has the project been vetted by the consultancy cell of the Bank or consultants of repute? Give details Amount Give details*

43

___________________________________________________________________ ___________________________________________________________________ What is the repayment period you are looking for the term loan? What will be the annual cash accruals? What will be your liability towards payment of installments and interest on term loan in a year? Whether the cash accruals will be sufficient to take care of the repayment liability?

Anything else you would like to tell about your business

What is the collateral you would be able to offer? GIVE DETAILS Item Value Basis

TOTAL Please tell us about your further plans : What is the level of sales you are projecting?

What is the level of receivables you are expecting in terms of months of sale? What is the level of finished goods inventory you are expecting to maintain in terms of months of sale?

44

I certify that all information furnished by me / us is true, correct and complete. I have no borrowing arrangement for the company / firm with any bank except as indicated in the application form. There are no overdues / dues owed by me or the firm/company. No legal action has been taken against me / us firm / company. I shall furnish all other information that may be required by Bank in connection with my application. The Information may also be exchanged by you with any agency you deem fit. You, your representatives of any other agencies as authorized by you may at any time inspect / verify my fixed assets, books of account etc. in our factory /business premises as given above. You may take appropriate safeguards/action for recovery of banks dues including publication of defaulters name in web site/submission to RBI. I further agree that my loan shall be governed by the rules of State Bank of India as may be in force from time to time. Place : _______________ For and on behalf of the company

Date : _______________

Signature of Chief Promoter / Chief

ANNEXURE-II

LOAN APPRAISAL
45

ASST GENERAL MANAGER / CHIEF MANAGER: - FOR SANCTION APPRAISAL MEMORANDUM UNDER SME SMART SCORE Branch: SEGMENT : C&I / SSI / SBF (Micro/Small Enterprises) The proposal conforms to the extant instructions of the scheme. The scores awarded under credit scoring criteria are as under: SEGMENT MIN SCORE MARKS SCORED Personal Details 15/30 Business Details (or) 25/50 Green Field ventures Collateral Conditions 10/20 Total Score 50/100 (To be eligible under the scheme, the unit should get a minimum score of 60% with a minimum of 50% under each sub-head) 1. PROPOSAL FOR I. Sanction of a. b. II. Approval for c. d. III. Confirmation of 2. Details of Credit limits Rs.in lakhs Facility Existing Limits Facility Proposed Limits CC(Hyp) CC(Hyp) SME Credit Plus TL LC/BG (As sub limit of CC(Hyp)) Total Limits 3.Name of the Borrower 4.Name of Proprietor /Partners/Directors 5.Address Factory Office 6.Constitution Proprietorship/Partnership/ Private Limited Company SME Credit Plus TL LC/BG (As sub limit of CC(Hyp)) Total Limits

46

7.Line of activity 8.Year of Incorporation 9.Banking with SBI since 10.IRAC Status 11.Details of Associate Concerns/Family Concerns and their Bankers Any NPAs among associates? 12.Date of last sanction (not applicable for fresh exposures)

13. Position of the account as on lacs Facility Limit MV

Rs in AV DP O/S Irregularity, if any

(Not applicable for new units) 14. Brief background & History :-( to be brief and in bullet points only) (Comments on management, products, tie-up arrangement if any, quality approvals/certifications etc) 15. Performance and financial indicators: 31 March YR.BEFORE LAST LAST YEAR Audited Audited Domestic Sales Export Sales Net Sales Profit after tax PAT/NS (%) Cash Accrual Rs in lacs CURRENT FOLLOWING YEAR YEAR Estimates Projections

47

Paid up capital TNW TOL/TNW Current Ratio Comments on Financials ;( Brief bullet points only) 16. Term Loans Project Details

Project Cost Rs. Bank Loan Recommended Rs. (As per assessment in annexure-III)

Debt/Equity 17. Working Capital Requirement: Working capital limit of Rs.------ has been assessed for the year --- and Rs.----has been assessed for the year -----, as per the Projected balance sheet method/traditional method as per the workings as on annexure-II. (After satisfactory review of the limits assessed for the first year, additional limits for the subsequent year shall be released. However documents for the higher of the limits to be obtained at the initial stage itself.) 18. Comments on conduct of Account: (covering irregularities, non-compliance, LC devolvement, BG invocations, etc.): Comments on Summations vis--vis sales Period under review Credit summations Debit summations Gross sales Opening Sundry Debtors

48

Closing Sundry Debtors Comments: 19. Whether (a) the name(s) of the Individual/Directors appear(s) in RBIs list of defaulters/RBIs list of willful defaulters & (b) the Individual/Directors name figures in ECGCs caution list: Particualrs RBI Willful Defaulters list(Non-Suit filed) Rs.25lacs and above CIBIL List(Suit filed) Rs.25 lacs and above Date Position

ECGC specific approval list

20. Comments on I&A and other audit reports, which have an impact on credit risk on the unit:, if any: Name of Report Date of report Serious irregularities/ Adverse features remaining unattended Comments in last I&A report & its present status Company's audited Balance Sheet (Qualifications)

21. If the unit has scored less than 60% marks in any of the individual parameters in SME Smart Score, please comment critically on those parameters (even though the aggregate score may be more than 60%)

22. Recommendations; Recommended for sanction of Working Capital limit of Rs. Term loan of Rs. --------------------------Total limit Rs.
49

On the terms and conditions as set out in Annexure-VI Appraised and Assessed Signature & Name by Designation & Date Enclosure: Applicants application.& others Statement of Credit Score arrived as Annexure -I.

Sanctioned by

Controlled by Signature Name Designation Date

50

CREDIT SCORING CRITERIA Name of the Company/ Firm : Name of the Chief Promoter / Chief Executive : (In case of partnership concerns where the partners are having equal stake the personal profile of the active promoters as declded by the concern could be taken) 1. Sr. No. 1. Age Personal Details : Parameters Maxi mum Marks 5 4 3 1 2 0 5 0 4 3 1 5. Experience in the line of trade Spouse details Assessed for income-tax Deposit account with SBI (minimum deposit should be Rs. 10,000 in the period under review) 9. Have life insurance policy Marks scored 5 3 2 1 0 2 0 8. 5 3 2 1 0 30
51

Marks Scored

Criteria

Details of Documents Verified

18 to 24 25 to 49 50 to 59 60 to 65 Up to 3 >3 Own Not owning house a

2. 3.

No. of children Owning a house

4.

Academic qualification

Professional Graduate / P.G. Matric Below Matric More than 5 years 2 to 5 years less than 2 years Employed Homemaker Assessed Not assessed 3 years and above 6 months to < 3 years < 6 months Yes No

6. 7.

Minimum score should be 15 marks Business Score : 2 A. For existing units which have not so far availed any loan from the Bank. If takeover from another Bank, takeover norms, prescribed by the Bank are to be first evaluated and fulfilled. Sr. No. 1. Parameters Maxi mum Marks 5 Marks Scored 5 3 2 5 3 2 5 3 3 0 0 2 6. 7. Line of activity Competition 1 4 1 0 4 3 2 5 3 2 1 5 3 2 5 3 2 10. Repayment period (Not applicable for only working capital loans) Gross DSCR (not 5 5 3 2 6
52

Criteria

Details of Documents Verified

Years in business

2.

Continuous net profits (before tax) Sales show a rising trend Factory premises

3. 4.

5 3

5.

Know-how

8.

TOL/TNW (Quasi equity to be added to TNW and reduced from TOL) Quality of receivables

9a.

9b.

Quality of finished goods inventory

11.

5 years & over 3 years to < 5 years 1 years to <3 years Last 3 years Last 2 years Last year Last 3 years Last 2 years Owned or over 5 year lease Rented Specialized knowhow Common knowledge Priority Sector Non priority Sector Low Medium High 2 & below >2 but upto 3 >3 but upto 4 >4 but <5 Up to 3 months of sales >3 but up to 4 months of sales >4 months of sales Upto 1 month of sales >1 upto 2 months of sales >2 months of sales. Upto 3 years >3 to 5 years > 5 years >2

applicable for only working 3 Between 1.5 tand 2 capital loans) 2 < 1.5 Marks Scored 50/40 Items 10 & 11 are not applicable for working capital loans alone. In that case the score should be normalized for 50 (marks scored / 40) x50) Minimum Score should be 25. 2B. For Greenfield Ventures : Parameters Sr. No. 1.

2.

3. 4. 5.

6. 7.

8a.

Maxi mum Marks Branch is in the know of 10 business ( includes cases where the Project is 0 appraised by consultants of repute) Manufacturing / Servicing / 5 trading / process is well known to applicant to 0 produce / service / trade the required quality of the product Location advantage 2 0 Availability of utilities 2 including labour 0 Firms capacity to sell the 5 product at the price and quantity. 0 Line of activity 1 0 TOL / TNW (Quasi equity 5 is to be added to TNW 3 and reduced from TOL) 2 1 Quality of receivables as 5 per projections 3 2

Marks Scored Yes No

Criteria

Details of Documents Verified

Yes No

Yes No. Easy Ok Good OK Priority Sector Non Priority Sector 1 and below >1 upto 2 >2 up to 3 >3 Up to 3 months of sales More than 3 up to 4 months More than 4 months Up to 1 month of sales >1 but upto 2 months of sales > 2 months of sales >2 1.5 to 2
53

8b.

Quality of finished goods inventory as per projections

5 3 2

10.

DSCR (not applicable for only working capital loans)

5 3

Marks Scored Minimum Marks : 25 out of 50.

2 50 / 40

<1.5

3. Collateral Conditions :

Sr. No. 1.

Parameters

Maxi mum Marks of of 15 12 10 5 0

Marks Scored

Criteria

Details of Documents Verified

Equitable Property property

Mortgage : Value

75% and over 50% to <75% 25% to <50% <25% Nil

(If TDR or cash equivalent is offered as security multiply cash equivalent by 2 and add to the collateral value) / loan amount (%) 2. Residential part of 1 Property as

5 0 20

Yes No

Marks Scored

Minimum Marks are 10 (except in cases where Collateral should not be asked as per Banks norms, the minimum mark will be Nil)

54

Annexure-II Name of the Borrower: ASSESSMENT OF WORKING CAPITAL I. For SSI, SBF and Retail traders: 1.Projected Turnover Method (Nayak Committee Method) a. Estimated Sales for the Current year b. Working capital required (25% of a) Eligible Bank Finance (80% of b) Bank finance Required 2.Assessment as per Traditional Method Estimated Purchases in the current Year Estimated Average Raw Material Holding at any time (Calculated at cost of Purchases) Estimated Average holding of Stock in process and Finished goods at any one time (calculated at cost of Production) Estimated Average Receivable outstanding at any one time Total Requirement Less estimated average credit enjoyed on purchases Less Other Sources like unsecured loans, plough back of profits etc Bank Finance Required Working Capital Assessed/recommended A or B above which ever is higher i.e II.For Self Employed and Professionals 50% of Gross annual income as declared in their Income Tax return. III.Comments on Production aspects: (covering location advantages, availability of raw material and other utilities like water, power, fuel, labour etc. IV.Brief Comments on Marketing Aspects: (B) (A) Rs.in lakhs. Estimated Projected Ist year 2nd Year

55

V. i) Assessment of EPC limits: Sr. No 1 2 3 4 5 6 7 8 Particulars Estimated Exports Exports - at cost Lead time and usance period (includes order period / manufacturing period etc.) No. Of Cycles in a year EPC requirement per cycle Less:- Margin on EPC % Eligible Limit EPC limit recommended

Rs.in lakhs Estimated Ist year Projected 2nd year

ii) Assessment of EBD limits: Sr. No 1 2 3 4 5 6 7 8 Particulars Estimated Exports Exports on Usance bill basis Usance period Lead Time No. of cycles in a year Eligible EBD Facility Limit requested by the unit Limit recommended Rs.in lakhs Estimated Projected Ist year 2nd year

iii) Brief Comments on the above limits: VI. Assessment of Non fund based limits: i)Assessment of LC limits: Rs.in lakhs Annual Raw Material purchases Monthly Raw Material purchases Monthly Raw Material purchases through LCs @ Average Usance Period (B) Lead Time and transit period (C) Total of B and C (D) LC limits required (= A X D) Recommended LC Limits % (A)

56

Assessment of BG limits: Rs.in lakhs Outstanding BGs as on Add: BGs required during the next 12 months, as under 1.Earnest Money deposit 2.Security Deposit 3.Advance Payment BG 4.Retention Money Deposit/Maintenance Guarantee 5. Guarantees on account of sales tax, commercial tax and excise duty payments Less: Estimated maturity/cancellation of BGs during the period . Requirements of BGs Recommended BG limit Brief comments on requirements of above limits:

57

Annexure-III Name of the Borrower: Assessment of Term Loan: 1.Project Details Project cost Land &Buildings Plant& Machinery WC margin Contingencies Total project cost Means of finance Own funds Borrowings from friends and relatives Bank finance others Total means of finance Debt /Equity : Cost Margin (%) Margin amount Rs.in lakhs. Required Bank Finance

3. Details of capital expenditure i.e land and factory building as well as machinery proposed to purchase: 4. Remarks on cost of project & means of finance (in brief)

5. Term Loan Assessment: Years Net Profit Depreciation Cash Accruals Repayment obligations (including Interest) DSCR Average DSCR

1 (Act)

2 (E)

3 (E)

4 (E)

Rs.in lakhs 5 6 (E) (E)

6. Project implementation schedule: 7. Comments on Commercial viability:

58

Annexure-III-A (for SRTOs)

Name of the Borrower: Term Loan assessment for Transport Operators (SRTO) Cost of Vehicle/s Rs. Borrowers Margin ( %) Rs. Term loan recommended Rs. Assessment: Earnings 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Total No. of Kilometers to be run per day (estimated)/ No. of trips per day Earnings per Km / earning per trip No. of working days in a month Total monthly earnings 1 x 2 x 3 ..A Expenses Cost of Fuel per litre Quantity of fuel required per month Cost of fuel per month Monthly Wages / batta for driver / cleaner etc Maintenance Repair Insurance (annual premium / 12) MV Tax (annual tax /12) Interest on borrowings Sustenance Other expenses Total Monthly Expenses (5 to 15).B Monthly surplus . A - B Monthly TL repayment DSCR 16/17

Brief details of above workings:

59

Annexure-IV Name of the Borrower: TERMS AND CONDITIONS 1. Facility Limit 2. Security Primary Collateral

WC: TL:

3.

Personal Guarantee (Indicate Net worth of Guarantors with date of compilation of opinion reports) CC(HYP): Interest TL: (Linked to SBAR) Margin(%) Stocks: Term loan: Receivables: Cover Period: BG/LC (cash Margins): CC(HYP):- Repayable on demand. TL: Sanction valid for two years. A review shall be made after 12 months. Quarterly To be submitted monthly.

4.

4. 5. 6. 7. 7. 8. 9. 10. 11. 12. 13.

Repayment Validity of Sanction, Review/Renewal Inspection Stock Statement Insurance Processing fee EM Charges Commitment Charges

CC(HYP):Term Loan:-

Penal Interest Documents As per SME Documentation Other Stipulations, if any.

60

FORMAT FOR ANNUAL REVIEW /RENEWAL OF LOANS SANCTIONED UNDER SME SMART SCORE PROPOSAL FOR REVIEW OF WC AND TERM LOAN SANCTIONED UNDER SME SMART SCORE' SCHEME. 1.Name of the unit 2 Constitution Proprietorship/Partnership/Private limited Company 3.Name of the Proprietor/partners/ /directors 4. Business Address

Phone/Cell No. 5.Nature of activity 6. a).Date of Last Sanction/review b) Sanction is Valid up to 7. IRAC Position as on 8.Present Position of Accounts as on date (Rs. In lakhs)

Facility

Limit

DP

O/S

Irregularity if any

CC TL LC/BG Comments on Conduct of above accounts:

9.Financial parameters (Rs. In lakhs)

Year

Earlier Estimated (previous year)

Actual achieved (previous year)

Estimated (Current year)

Net sales PBT Cash Accrual TNW TOL/TNW CR Comments( to be commented on actuals for deviations over estimates, if any)

61

9. Conduct of WC a/c (Rs. In lakhs)

Annual Turn over estimated Rs. Annual Credit Summations in the account Rs. Value of the account: Rs. (Interest/Exchange/commission Booked) Cross selling Products Booked : (Give the name of the products booked) Retail Business Booked Number of retail loans and amount booked for the promoters/employees :

10. Whether earlier sanction terms complied with. 11. Whether irregularities observed in I&A report rectified.? If not present status 12.Other Comments ( from Risk Angle) (On associates, conduct of accounts, Competition, quality of products, CIBIL report for individuals or corporate as applicable etc., and other relevant risks. Bullet points only)

14. Recommendations The Conduct of WC loan and Term loan has been reviewed and found satisfactory. The Credit Score for renewal of limits is as per annexure I, is satisfactory. 1.Recommended for continuation of Working Capital limit of Rs. 2. Recommended for release of additional working capital limit of Rs. as per the original sanction on (give date) for the projected year----On the above terms and conditions as already set out in the original sanction dated Appraised by Signature Name Designation
62

Approved by

Date

63

Name of the Borrower: Credit Scoring Model for Renewal proposals Sr. Parameters No. 1 Actual sales/projected sales Maximum Marks Criteria marks Scored 10 90% & above 70% to < 90% 50% to < 70% Below 50% 10 Increasing Flat Decreasing 5 Decreasing and upto 3 Decreasing but above 3 Increasing but upto 3 Increasing but above 3 15 Excellent Good OK 10 90% & above 70 89% 50 69% < 50% (% of sales) 50 Mar ks 10 8 5 2 10 5 1 5 3 3 0 15 10 5 10 7 5 NIL

PBT/NS (%)

Change in TOL/TNW during the year

Overall conduct of the account and working of the unit Credit summations in the account during the preceding 12 months MARKS SCORED

Minimum Marks should be 30/50 Veto Power if the account is unsatisfactorily conducted i) cheques are frequently returned ii) debit balance (outstanding) is over the drawing power for over 160 days in the year iii) non-compliance of critical terms and conditions (frequent devolvement of LCs and invocation of guarantees/non receipt of stock statements etc. have not been mentioned as they would be reflected in ii) Appraised by Name Date Approved by

RICE MILLS PLUS


64

1.

Target Group

Rice Mills with proven track record as well as new units set up by our existing borrowers a) b) c) Profit making existing units with CRA rating of SB4 and above as per the simplified CRA system for Rice Mills Take-over of units conforming to takeover norms is also permitted In the case of new units set up by our existing borrowers, the regular CRA model for SSI / C&I units has to used and should be at least SB3 rated to be eligible for finance under Rice Mills Plus. Also, 50% of the partners should be our existing borrowers and management control should vest with them. Acquisition of machinery/factory building for modernisation Working capital needs

2.

Eligibility

3.

Purpose

a) b)

4.

Type of facilities

Term Loan, Cash Credit, outward bill limit, LCs , BGs, SME Credit Plus

5.

Quantum of Finance

No upper Ceiling. Nayak Committee norms are applicable: minimum of 20% of projected annual turnover. A higher limit can be considered selectively on projected balance sheet method. Peak and non peak limits can be fixed depending on actual need. Separate limits for other activities:Wherever the borrowers are engaged in other activities, separate limits may be considered based on viability and other aspects of assessment and appraisal.

6.

Margin

: Term Loan 15-25%

Working Capital

65

Stocks :Paddy &Rice - 15%-20% Brokens Bran - 20% - 30%

Gunny bags - 40% Book debts40%(cover period max. 60 days) Margin for book debts can be lowered upto 25% where adequate collateral is available. 7. Rate of Interest : CRA Rating ( NEW) Interest rates

Collateral coverage = >75%

Collateral coverage > 50% but <75%

SB1& 2

2.00% below SBAR i.e. present effective rate of 10.25% p.a. 1.50% below SBAR i.e present effective rate of 10.75% p.a. 1.00% below SBAR i.e present effective rate of 11.25% p.a. At SBAR i.e present effective rate of 12.25% p.a.

1.50% below SBAR i.e present effective rate of 10.75% p.a. 1.00% below SBAR i.e present effective rate of 11.25% p.a. 0.50% below SBAR i.e present effective rate of 11.75% p.a. 0.50% above SBAR i.e present effective rate of 12.75% p.a.

SB 3,4 & 5

SB 6 &7

SB 8 & 9

For Term Loans

66

SBTL 1&2

1.50% below SBAR i.e present effective rate of 10.75% p.a. 1.00% below SBAR i.e present effective rate of 11.25% p.a. 0.50% below SBAR i.e present effective rate of 11.75% p.a. 0.50% above SBAR i.e present effective rate of 12.75% p.a.

1.00% below SBAR i.e present effective rate of 11.25% p.a. 0.50% below SBAR i.e present effective rate of 11.75% p.a. At SBAR i.e present effective rate of 12.25% p.a. 1.00% above SBAR i.e present effective rate of 13.25% p.a.

SBTL 3,4 & 5

SBTL 6& 7

SBTL 8 &9

No further improvement in pricing under the scheme will be allowed by the circle functionaries within the discretionary powers vested with them.

8.

Security: - Primary - Collateral

Hypothecation/pledge of assets created out of Bank finance a. For loans upto Rs.5lacs-NIL. b. For Loans over Rs. 5 lacs: i. Units have credit rating SB-7 and above:

Equitable mortgage of property / belonging to borrower /guarantor valued not less than 50% of the loan amount.
ii. Units having credit rating of SB-8 and SB-9 : Equitable

mortgage of property / tangible security belonging to borrower /guarantor valued not less than 60% of the loan amount.
9. Processing fees Rs.115/- per 1 lac Upfront fee for term loans 0.60% of the loan amount Issuance of drafts/ BCs/ cheque collection 50% of applicable charges. 10. Repayment : TL 5 to 7 years excluding the gestation period of maximum 12 months

11. Documentation

As applicable to SME units

67

Product Highlights:

So far, Rice Mills have been extended credit only on very stringent terms and even SB1 & SB2 rated companies could not be financed adequately due to the stiff terms of assessment. Keeping this constraint in view, this product has been introduced in the SSI segment with a simplified credit rating model which includes weightage for achievement for projected sales and loyalty to the Bank factor. A specially designed appraisal format has been designed for the product. This product can be extended at all branches handling CAAs and also those identified for the purpose by the Circle Management Committee. As regards assessment, for limits upto Rs.5 crores, Nayak Committee norms for working capital have to be adopted. New units can also be financed and the regular CRA model applicable to SSI/C&I units has to used for arriving at the CRA rating. Marketing Tips: Simplified assessment method for arriving at WC & TL components. SME Credit Plus can be granted which is repayable in 6 months. Non fund based facilities can be extended especially for exporters. Outward Bill limit upto 60 days cover can be considered in specific cases. A traditional banking product with a new look and very attractive terms of finance.

FAQS
Can the loans under this scheme be handled at rural branches? Yes, provided the Circle Management Committee authorizes the branch for handling this business. What is the rating pattern under the simplified model designed for this product? The rating model for this product is as under:-

68

Circular Reference:

Sl No 1

Circular No

e-Circular Reference No

SME/Mfg./RKG/Cir-12 / 2009-2010 08th June,2009 SME/RKG/ Cir-33/2008-09 dated October 22, 2008

152/2009 - 10

Credit rating score Over 90% Between 75 to 90 % Between 60 to 75 % Between 50 to 60 %

Rating SB1 SB2 SB3 SB4

RICE MILLS PLUS - CREDIT RATING SYSTEM


S.No. 1. Current Ratio Parameters >=1.15 >=1.13 <1.15 >=1.10 <1.13 >=1.05 <1.10 <1.05 2. TOL/TNW Ratio <=2.50 >=2.50 <3.50 >=3.50 <5.00 >=5.00 <6.00 >6.01 3. Gross average DSCR for all loans inclusive of the proposed term loan >=2 <2.00 >=1.75 Score 15 12 8 5 0 10 8 6 4 2 10 7

69

<1.75 >=1.50 <1.50 4. Interest and instalment obligation of cash credit and term loan(s) Timely repayment on due date Delayed payment upto 30 days Over 30 days

5 2 10 5 0

5.

Total sales : Inventory + sundry debtors

>= 4 times >=3times <4 times >=2 times <3 times <2 times

10 8 4 2 5 3 1

6.

Submission of stock statements, balance sheets, renewal data

Timely submission One month delay Irregular in submission

7.

Achievement of projected sales

>=85% < 85% >=50% <50% >=25% <25%

5 4 3 0

8.

Supported by tangible collateral security including 2nd charge on fixed assets

Security coverage to total loan >=100% >=50% <100% >=25% <50% <=25% 10 8 4 2 10

9.

Operational experience in cash credit

Liability not exceeding DP / Limit Liability exceeded limit Occasionally. Excess drawal adjusted in time. Liability exceeded frequently and adjusted with some delay.

3 10. Compliance with terms and conditions of sanction Complied with promptly Complied with delay Not complied with 5 3 0

70

11.

Age of relationship with the Bank (Banking with us since.)

Above 5 years >3 years <5 years > 1year <3 years

5 4 2 5 4 2

12.

Age of the firm / Company#

Above 5 years >3 years <5 years >1 year <3 years

Remarks a) Gross average DSCR for all loans (Sr. No. 3) will not be applicable in case the unit is not seeking term assistance. In such cases, the total score need to be normalized to 100. b) The higher age of the firm / company will reduce the chances of default. Consistence downfall in performance inclusive of profitability parameters should fetch a firm / company a score of 2 irrespective of the age of the firm/company.

71

Annexure-II
Commercial Advances SSI Segment : Rice Mills Unit : IRAC Credit Rating Date of last renewal

1.

Proposal for : (Please tick)

Renewal of working capital limits at the existing level


Renewal of working capital limits with enhancement Sanction of working Capital limits New Sanctioning Authority (CCC-I / CCC-II NWCC / SECC / AGM / CM / BM)

2.

Total indebtedness : (Rs. Lakhs)

Nature of Facility

Existing

Proposed

Fund Based
Cash Credit (MT) Cash Credit (Hypothecation) Cash Credit (Outward Bills Clean) Medium Term Loan Total (A)

Non Fund Based


Letters of credit Bank Guarantees Total (B) Grand Total (A+B)

3. a)

Borrower Name :

72

b) c) d) e)

Factory at Constitution Date of Partnership deed Name & Worth of Partners

: : : : Partnership

S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. f) g)

Name

Worth in Rs. Lakhs

Products manufactured / processed Date of commencement of Commercial production

: :

h) i) j)

Dealing with SBI since Whether the firm has power to borrow Names of authorized signatories

: : Yes / No.

(If applicant is other than a partnership, please alter the columns suitably) 4. 5. 6. Brief History : Production facilities : As per Annexure I Key Financial Indicators :

73

Actuals 31.3. Sales Rice - levy (FCI) Quantity (Quintals) Value Rice - levy (APSCSC) Quantity (Quintals) Value Rice - Non Levy Quantity (Quintals) Value Brokens Quantity (Quintals) Value Bran Quantity (Quintals) Value Husk PURCHASES Quality wise Quantity (Quintals) Value Gross Profit Net Profit Tangible Net Worth Current Assets 31.3

Estimates 31.3.

Projections 31.3

74

Current Liabilities Net Working Capital Current Ratio TOL / TNW Current Year Sales from 1 April to 30 September
st th

7.

Comments on the financial position / indicators :

Sales

Net Profit

Annex - I
Production facilities :

Owned Capacity of Rice Mills (Tons per hours) Number of shifts per day Total No. of working days Total Annual Capacity

Leased

For the Leased Capacities :

Name of the Owner


Date of Lease deed Valid up to

:
: :

75

Whether the lease rights are Assignable Clauses detrimental to the Banks Interest if any

Yes / No.

II. Storage Capacity :

Milling Hall Open Yard Godown Owned Rented Total Storage capacity

:
:

:
: : :

76

For Rented Godowns


Whether rent letter obtained : Yes / No.

Assessed Quantity of
III. Production (Projected for the current year)

Levy Paddy proposed to be milled (Quintals) Production (in Quintals) Rice Brokens Bran Husk Total

Non Levy

Total

IV. Sales (Projected for the Current Year)

Levy

Non Levy

Total

Rice Brokens Bran Husk Total

Monthly Turnover (in Rs. Lacs) for the last twelve monthas)

77

Month Turnover

10

11

12

V. Utilities :

Required Power Transco Generator Water Labour

Available

VI.

Licenses / Statutory Dues / Litigation

SSI Registration Number Position regarding Statutory dues Income Tax Sales Tax Any Pending suits against the unit by the Government Departments / Corporations Yes / No. If Yes, furnish the particulars on a separate sheet) Whether all the required licenses are obtained and kept on Record Yes / No. If Yes, furnish the particulars on a separate sheet) Associate Concerns if any and the position of accounts Assessed upto Assessed Value

I
Units Name Date of Sanction Limit (Rs. Lakhs)

II

III

78

D.P. (Rs. Lakhs) O.S. (Rs. Lakhs) IRAC Status

VII. Commercial Data


Before Last Year Levy Quota allotted* (Quintals) Levy sales (Quintals) Levy Sales (Value) Non-Levy sales (including brokens, bran and husk etc.) value Maximum Drawings at any one time Interest Income* Other Income Last Year Current Year (Proj.)

* Expected, If order is not yet received (Enclose copy of the present order issue by the competent authority. If the present one is not yet received, enclose previous years order)

Overall Risk Level

Score out of 100

Credit Rating Awarded

Asst. / Deputy Manager (Appraisor)

Branch / Chief Manager (Assessor)

TRADERS EASY LOAN (TEL)


79

1.

Target Group

1.

Wholesale and retail traders in agricultural or industrial commodities 2. Professionals and self employed 3. Small business enterprises 4. Commission agents engaged in purchase and sale of food grains and other commodities 5. Cotton ginning mills that purchase cotton and sell it after ginning. 6. Oil Mills 7. Rice Mills (Rs.5 lacs to Rs.500lacs) Cold storage units upto Rs.1 crore. Existing customers with a satisfactory track record. New connections including take - over can be considered subject to take- over norms.

Eligibility

Purpose

The loan can be considered for acquiring fixed assets fro the business and/or build up of inventory /current assets. Cash Credit / Demand Loan/ Term Loan Working capital finance can be availed either as CC or DL or partly CC and partly DL

Type of facilities

Quantum of Finance

Rs.0.25 lac to Rs.500 lacs. For traders and wholesalers, for professionals and self employed The credit needs will be assessed for the purpose stated and the loan component shall not exceed 20% of the projected annual turnover or 75% of the capital costs to be incurred for business or 65% of realizable value of property whichever is less. In the case of rice mills, the quantum of finance can be assessed based on pucca records of the unit and can be fixed anything between 20% to 40% of the projected annual turnover. For existing borrowers who have been sanctioned other limits the Loan can be sanctioned subject to :the existing loan accounts have conducted satisfactorily for the last three years; ii) the eligible amount ie., the outstandings in the existing accounts and the proposed loan should be within 65% of realizable value of the property mortgaged to the Bank without resorting to revaluation of the property. 35% of the realizable value of the property to be mortgaged or 25% of the costs to be incurred for the business if TEL is availed for capital 80 i)

Margin

expenditure Rate of Interest : CRA assessment is dispensed with for this product. CC / DL 0.25% below SBAR Minimum of10.50%

Term Loan - 0.25% above SBAR - Minimum 11.00% ZCC has been delegated with powers to reduce the interest rates by 0.50% based on value of collateral, value of connection and the level of competition. 8 Security: - Primary - Collateral - EM of land and building or tangible security by way of TDRs, NSCs, etc. Open land whether inside or outside the municipal limits should not be accepted as collateral. In exceptional cases, on business considerations, approval may be sought from SMEBU, Corporate Centre for accepting open land as security. 9. Processing fees Working Capital limits (FB + NFB) For loans upto Rs.2lacs Rs.250/For loans above Rs.2lacs Rs.250/- per lac or part thereof, Maximum Rs.10lacs For Term Loans above Rs.2lacs Upfront fee of 1% of the loan amount to be recovered 10 Repayment Cash Credit - On demand Demand Loan - 36 months Term Loan - Upto a maximum of 60 months based on cash flows in monthly / quarterly / half yearly installments 11 Documentation : As applicable to working capital advances/ term loan for trade and services sector CC limit is valid for two years, but subject to Annual Review. At the time of renewal / annual review of the account, if the limits are assessed to be less than the existing limits, and the borrower is not in a position to repay the excess amount in 90 days, the excess amount would be carved out as a demand 81 : - Hypothecation of stocks and receivables

12

Special features

loan and may be allowed to be repaid within a maximum of 24 monthly installments. During this time, if on later renewal, the borrower is eligible for higher limits, the repayable amount and the repayment period would be reduced accordingly. Stock statements need to be furnished at the time of sanction and at quarterly intervals, as at the end of February, May, August and November thereafter. Stock statements waived for TL and DL Inspection should be at quarterly intervals In case the loan is by way of CC, the credit summations should be at least 200% of the CC limit. TL/DL should be with monthly repayment schedule and has to be reviewed annually.

Product Highlights:
This is a product which is very user friendly in as much as the process of assessment of the

limit and delivery has been simplified and the need for periodical stock statements has been reduced to the minimum. Marketing Tips.
This is suitable for a large number of traders in the medium range who are now unable to access bank finance due to financial compliances which are not always prevalent in the particular trading activity. The rate of interest is very competitive. The loan can be restored after 6 months in case the conduct of the loan has been regular. APPLICATION FORM FOR MORTGAGE LOAN (TRADERS EASY LOAN) TRADE & SERVICES SECTOR

1.
2.

Name of the Unit


Address along with Telephone No. / Fax No./ e-mail if any

:
:

3.

Activity

Trading in .. Services : ..

4.

Date of Commencement

82

of business

5.

Constitution

Proprietorship

Partnership

(Please tick (

))

Corporate

Any other

6.

Details of Proprietor / Partners / Directors etc.

Name

Age

Qualification

Means*

Opinion Report on the Banks prescribed format should be prepared by branch officials.

7.

Present credit facility enjoyed, if any :

Name of the Bank & Branch

Facility*

Limit

Outstanding

In case no credit facility enjoyed and only a current account is maintained please advise specifically.

8.

Associate / Sister concerns, if any :

83

Name of Partners /

Banking with

Name of the Unit

Proprietor

9.

Credit Facilities Required :

Fund Based : Term Loan : Non-fund based Letter of Credit : Bank Guarantee :

10.

Details of Security Offered : Primary :

Collateral :

(i) Immovable Property

Description of Property

Name of the owner*

Market Value

84

(ii) Liquid Securities :

Description

Name of the Owner*

Face Value

When Acquired

Present Value

If owner is other than the proprietor / partner of the firm (i.e. guarantor), details of the guarantor viz. Name, Age, Residential Address and Phone No. etc. should be given :

Name of the Guarantor & Address

Age

Qualification

Means

11.

Key Financial Parameters : (for three years)

As on 31.3. (i) (ii) (iii) (iv) (v) Sales Net Profit Depreciation Cash Profit Tangible Net Worth

As on 31.3.

As on 31.3.

85

I / We declare that the information given in the application form are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to give under the SBI Traders Easy Loan Scheme. I / We confirm that I/We are not defaulters of any Bank. I / We also confirm that I / We have / had no insolvency proceedings against me/us nor have I / we ever been adjudicated insolvent. I / We undertake to abide by the Rules and Regulations of State Bank of India in respect of SBI Traders Easy Loan Scheme.

Signature of Borrower

Date :

Place :

List of Documents to be attached :

1. 2. 3. 4.

Copy of collateral security being offered. Latest copy of income-tax return / Assessment order etc. Statement of account from the existing banker for the last 6 months. Copies of relevant license, documents pertaining to ownership / tenancy / lease agreement etc., in respect of premises where activity will be carried out.

86

Assessment format for Traders Easy Loan (TEL)

Readily realizable value of property offered as security:

Rs.

(A)

Maximum eligible amount under TEL (65% of A) Assessment for working capital assistance (to be released as CC limit)

Rs.

(B)

Actual turnover in the previous financial year

Rs.

(C)

Projected turnover for the current financial year

Rs.

(D)

(If the projected turnover is in excess of 125% of ( C), the same should be substantiated with proper supporting factors that justify increase in turnover by over 25%).

Working capital to be provided as TEL=20% of projected turnover (D)Rs

(E)

87

In case of renewal: Credit summation in the CC account for the past 12 months Rs. (F)

Eligible working capital limit based on credit summations in the Bank A/c In previous year(in case of existing loan accounts) assuming 25% growth in Turnover and minimum 50% sales being routed through Bank A/c. (50% of F) Rs. (G)

Amount to be sanctioned is lower among (B) or (E) or (G)

If the borrower is already enjoying a higher limit than what is arrived at as above, the excess amount may be segregated as a Demand Loan and repayment be set for the same over a 12 month period.

Assessment of TEL for acquisition of fixed assets: Cost of equipments being purchased, including erection and Other one-time costs that are being capitalized by the borrower. Rs. (H)

Eligible amount of Term Loan under TEL =75% of (H)

Rs.

(J)

Borrowers may avail Tel for both fixed assets and current assets and their need can be separately assessed as above and the total exposure be restricted within (B) above.

Where there is already an existing loan on the property: Sometimes borrowers are requesting for TEL against a property on which there is already a loan(e.g housing loan). In such cases, the total indebtedness to the Bank{i.e. limits in case of CC and outstandings in case of TLs should be restricted to (B) above} e.g. If there is a Housing Loan against a property with current outstanding of (K), the value of Tel, ie (E) or (G)+(J)+(K) should not exceed the maximum eligible amount(B).

SBI SME COLLATERAL- FREE LOANS" (SMECFL)


88

SPECIAL SCHEME FOR MICRO AND SMALL ENTERPRISES UNDER GUARANTEE SCHEME OF CREDIT GUARANTEE FUND TRUST (CGTMSE) UPTO RS. ONE CRORE RATIONALE:

The liberalized SME-Collateral Free Loan Scheme with concessionary rates of interest under CGTMSE cover was launched mainly due to the following reasons: To attract good borrowers, to create separate pool of accounts with specific product code To monitor progress under the scheme and the trend of default To ensure hassle free credit flow to Micro & Small Enterprises To achieve the benchmark 20% YoY growth in MSEs set by the Reserve Bank of India and 60% sub target for Micro Enterprises in Micro & Small (MSE) advances.

Name of the Scheme: "SBI SME COLLATERAL- FREE LOANS "(SMECFL) Target Group

Micro & Small Enterprises as defined by MSMED Act 2006. New and existing Micro and Small Enterprises engaged in Manufacturing and service sector. Note : In respect of Micro & Small enterprises in service sector, Branches are advised to adhere to the RBIs guidelines on lending to Priority Sector i.e. small road and water transport operators, small business, professional and self employed persons and all other service enterprises under the ambit of Micro and Small Enterprises definition under MSMED Act are covered but finance to retails/wholesale trade, educational institutions, training institutions and SHGs are not eligible under the scheme.

Screening of Eligibility

i. For Loans below ` 25 lacs All bankable loans proposals below `25.00 lacs to Micro and Small enterprises eligible under the
89

guarantee coverage scheme of CGTMSE under the normal dispensation without insisting on minimum score. ii. For Loans between `25 lacs to `1.00 Crore Units having CRA Rating of SB-10 and above as per the applicable revised CRA rating norms as circulated by Risk Management Department from time to time.
CGTMSE Guarantee Coverage Purpose a. Working capital needs (FB+NFB). b. Term loan for construction of Building, office, acquisition of machines / equipments Mandatory

including expansion and modernization of the unit. Assessment a. Manufacturing Enterprises : Working Capital (WC): As per Nayak Committee norms (20% of the projected turnover), Term Loan(TL) : 75% of project cost,

b. Service Enterprises: Working Capital(WC) : 15% of the projected turnover /Revenue. Term Loan (TL) : 75% of project cost.

Quantum of finance

Total Exposure to the unit (FB+NFB) : Upto Rs. 1.00 crore (All facilities WC, TL & NFB facilities)

Type of Facility

Cash Credit, Letter of Credit, Bank Guarantee, Term Loan.

90

Repayment

Working Capital(WC) : On Demand Term Loan : Maximum Seven Years including

moratorium period not exceeding 6 months -1 year.

Submission of Stock Statement

Up to Rs.25.00 lacs, once in a quarter. Above Rs. 25.00 lacs once in a month.

Rate of Interest

The undernoted concessionary rate of interest will be applicable to loans sanctioned from 16th Nov. to 15th Feb. 2011. Loans below
LIMITS

Loans `25.00 lacs & above upto ` 1.00 crs SB-1 to SB-5 SB-6 to SB-10

` 25.00 lacs
Unrated 3.25% above

3.00% above base rate i.e. 10.60% p.a.

3.50% above base rate i.e. 11.10% p.a.

WC & TL for < 3 years

base rate i.e. 10.85% p.a.

TL for 3 years. To 5 years

3.75% above base rate i.e. 11.35% p.a.

3.50% above base rate i.e.11.10% p.a.

4.00% above base rate i.e.11.60% p.a. 4.25% above base rate i.e. 11.85% p.a.

TL for > 5 years

4.00% above base rate i.e.11.60%

3.75% above base rate i.e. 11.35% p.a.

Loan Processing and Service Charges

50 % of the normal rates. (Applicable on first time sanction and annually on working capital review /

renewal)

91

Other Charges

Normal rates

CGTMSE Fee

Guarantee fee & Annual Service Fee as per the rates prescribed by CGTMSE from time to time to be recovered.

Inspection of the Unit

Exposure upto Rs.25.00 lacs : Once in a quarter. Exposure above Rs. 25.00 lacs : Monthly.

Security

Primary Security as defined by CGTMSE : Definition of Primary Security in respect of credit facility shall mean the Assets created out of the credit facility so extended and / or Existing Unencumbered assets which are directly associated with the project or business for which the credit facility has been extended. (i.e. Plant, Machinery, land & building pertaining to the project or business). Guarantee: As per the extant guidelines of CGTMSE no third party guarantee should be obtained if the account is to be covered under CGTMSE Guarantee Scheme. However in case the constitution of the borrower is proprietary or partnership, the personal guarantee of proprietor / partner is not treated as third party guarantee. Personal guarantee of directors, were borrower

92

constitution is a company would be treated as third party guarantee


Application and Appraisal Format Annexure -I : Common loan application form for loans upto Rs.1.00 crs. Annexure -II :Appraisal below Rs.25.00 lacs Annexure - III :Scoring Model below Rs. 25.00 lacs Annexure - IV :Annual Review Loan proposals for loans of Rs. 25.00 to Rs.1.00 crore have to be appraised on format "S".

Documentation

As per the SME documentation.

Sanctioning Authority

As per the scheme of delegation of powers.

Credit Rating

a. Below Rs. 25.00 lacs : Preliminary screening and eligibility of the entrepreneur as per the scoring model. (Annexure- III) b. Rs. 25.00 lacs to `1.00 crore Simplified CRA

rating model as prescribed by CRMD. Any deviation in Hurdle Scores against individual risk parameters has to be approved by the competent authority.
Review / Renewal Working capital renewal every two years. However, performance of the unit and conduct of account will be reviewed annually for continuation of limits.

TAT

Under the scheme, formalities like valuation, NEC cum lawyer's opinion, are physical generally inspection not of

collateral

security,

involved.

93

Hence, after receipt of completed application form and documents as per checklist the loan has to be sanctioned within two weeks time.

Invocation of CGTMSE Guarantee

In

case

there has

is

a to

slippage take

in

the

account, measure

Branch/CPC

proactive

including invocation of CGTMSE Guarantee in the prescribed manner.

Product Code

Product Description For CC/OD accounts Product Code BR-CC SME COLLATERAL FREE LOANS SSI BR-CC SME COLLATERAL FREE LOANS SBF For TL/DL accounts BR-SME COLLATERAL FREE LN SSI BR-SME COLLATERAL FREE LN SBF For Non Fund Based Facilities BR-SME COLLATERAL FREE LOANS BG SME COLLATERAL FREE LOANS LC 7211-1001 6211-1901 6221-1901 6114-1901

6124-1901

7111-1001

Loans & Advances to Micro & Small Units have not to be classified under C&I Segment.

Part - 2 : OPERATING GUIDELINES OF CGTMSE FOR ACCOUNTS COVERED UNDER THE GUARANTEE SCHEME. Credit facilities eligible The Trust covers credit facilities extended by member lending institution(s) in respect of a single eligible borrower not

94

under

the Scheme

exceeding Rs.100 lakh by way of term loan and/or working capital facilities to the Micro and Small enterprises, without any collateral security and\or third party guarantees. Following credit CGTMSE. facilities are eligible for coverage under

Condition for coverage


under the Scheme

i. No collateral security and / or third party guarantee to be taken by the Bank. However, in addition to the assets created out of the bank finance, other encumbered assets, which are directly associated with the business / project can also be taken as security. The guarantee from the borrower and partners etc. can also be taken except the guarantee of directors in case loan is sanctioned to corporate borrower. ii.The account has not become bad or doubtful of recovery; and / or iii. The business or activity of the borrower for which the credit facility was granted has not ceased; and / or iv. The credit facility has not wholly or partly been utilized for adjustment of any debts deemed bad or doubtful of recovery, without obtaining a prior consent in this regard from the Trust.

Extent of Guarantee Cover

The category-wise extent of guarantee cover available is given as under:

Category

Maximum extent of Guarantee where credit facility is : Upto Rs.5 lacs Above Rs.5 lacs upto Rs.50 lacs Above Rs.50 lacs upto Rs.100 lacs Rs.37.50 lacs plus 50% of amount in default above Rs.50 lacs subject to overall ceiling of Rs.62.50 lacs

Micro Enterprises

85% of the amount in default subject to a maximum of Rs.4.25 lacs

75% of the amount in Default subject to a maximum of Rs.37.50 lacs

95

Small Enterprises

75% of default max. `37.50 lacs

Rs.37.50+ 50% of above Rs.50 lacs, Max. Rs.62.50 lacs

Women Entrepreneurs /units located in North East Region (incl.

80% of the amount in default subject to a maximum of Rs.40 lacs

S ikkim) (other than credit facility upto Rs.5 lacs to micro enterprises)

Rs.40 lacs plus 50% of amount in default above Rs.50 lacs subject to overall ceiling of Rs.65 lacs

All other category of borrowers

75% of the amount in default subject to a maximum of Rs.37.50 lacs

Rs.37.50 lacs plus 50% of amount in default above Rs.50 lacs subject to overall ceiling of Rs.62.50 lacs

Tenure of Guarantee

The guarantee cover under the CGTMSE would be for agreed tenure of the term loan/ composite credit. The tenure is 5 years or block of 5 years, in case of working capital credit facility covered under CGTMSE

Lodging of applications

In order to avail the guarantee cover lending institution must apply for guarantee cover in respect of credit proposals sanctioned in the quarter April-June, July-September, October-December, and January-March before expiry of the following quarter viz. JulySeptember, October-December, January-March, and April-June respectively. The entire operations under the guarantee scheme are in electronic mode (Online). For the purpose, all Operating Office of the Bank are allotted with Member-id, User-id and Password. The operating office concerned can log on to the website of CGTMSE by using this information and submit the applications online. CGTMSE picks the data uploaded by the Bank, periodically from its website and process the applications. The Operating Office concerned is required to login

96

to CGTMSE website and open the Reports module to see the status of the applications lodged by it. As soon as the guarantee cover is approved, a Demand Advice (CGDAN) is generated and the Operating Office concerned can get the same at the reports module in CGTMSE website. On receipt of the Demand Advice, the requisite guarantee fee as indicated in the Demand Advice, is to be remitted by the Operating Office to CGTMSE by demand draft payable at Mumbai.

Guarantee Fee

For commencement of guarantee cover, a guarantee fee at specified rate shall be paid upfront by the Member Lending Institution to the Trust within 30 days from the date of first disbursement or 30 days from the date of demand advice, whichever is later. The annual service fee at specified rate shall be paid by the lending institution within 60 days i.e. on or before May 31, of every year. The fee payable to the Trust under the CGTMSE is one-time guarantee fee [which ranges from 0.75% to 1.5% of the credit facilities sanctioned] and annual service fee [which ranges from 0.5% to 0.75% per annum on the credit facilities sanctioned as on March 31, each year] as detailed below: Credit Facility Upfront Guarantee(%) Annual Service Fee (%)

Annual Service Fee

NE Region (incl Sikkim) Upto Rs.5 lacs Above Rs.5 lacs to Rs.50 lacs Above Rs.50 lacs to Rs.100 lacs Lodgement of Claims 0.75 0.75 1.00 1.50 0.50 0.75

1.50

1.50

0.75

The lending institution may invoke the guarantee in respect of eligible credit facility if the following conditions are satisfied: a) The guarantee in respect of that credit facility is in force. b) The lock-in period of 18 months from either the date of last disbursement of the loan to the borrower or the date of payment of the guarantee fee in respect of credit facility to the borrower, whichever is later, has elapsed. c) The amount 97 due and payable to the lending

institution in respect of the credit facility has not been paid and the have been classified by the lending institution as Non Performing Assets. Provided that the lending institution shall not make or be entitled to make any claim on the Trust in respect of the said credit facility if the loss in respect of the said credit facility had occurred owing to actions / decisions taken contrary to or in contravention of the guidelines issued by the Trust. d) The loan facility has been recalled and the recovery proceedings have been initiated under due process of law. But mere issuance of recall notice under SARFAESI Act 2002 cannot be construed as initiation of legal proceedings for purpose of preferment of claim under CGS. Lending institutions are advised to take further action as contained in Section 13 (4) of the above Act wherein a secured creditor can take recourse to any one or more of the recovery measures out of the four measures indicated therein before submitting claims for first instalment of guaranteed amount. In case the Bank is not in a position to take any of the action indicated in Section 13(4) of the aforesaid Act, they may initiate fresh recovery proceeding under any other applicable law and seek the claim for first instalment from the Trust.

On a claim being paid, the Trust shall be deemed to have been discharged from all its liabilities on account of the guarantee in force in respect of the borrower concerned.

Part 3: FAQs: Issue Clarification

Whether the existing customers can be covered under the scheme

Yes, Existing and new customers can be covered under the scheme. In case of existing units, additional credit facilities in the form of term loan or renewal of working capital facilities can be covered as and when the facilities are extended, provided no collateral security and/ or third party guarantee is obtained.

Whether borrowers from all service sector enterprises are eligible under the Scheme?

As of now, all activities that come under service sector as per RBI's guidelines on 'Lending to Priority Sector' and MSMED Act, 2006 except loan to retail/wholesale trade, educational institutions and training institutions etc are eligible for coverage

98

under the scheme.

Whether loans given to Small Road Transport Operators are eligible for coverage under the Scheme? Whether credit facility extended to self-help group can be covered under the scheme?

Yes. Small road and water transport loans are eligible for guarantee cover.

No. At present, as per the Scheme, the credit facility extended to Self Help Group cannot be covered.

Is it compulsory for the borrower to obtain Income Tax Permanent Account Number [IT-PAN] to be an eligible borrower?

Yes, Under the Guarantee Scheme, a borrower is required to obtain IT PAN number prior to availing of credit facility. It is desirable to indicate IT Pan No. in all the application irrespective of the amount.

What is the definition of Primary Security in respect of a credit facility under CGTMSE coverage?

Primary Security" in respect of a credit facility shall mean the assets created out of the credit facility so extended and/or existing unencumbered assets which are directly associated with the project or business for which the credit facility has been extended.

What is the difference between primary security and collateral security?

Primary security is the asset created out of the credit facility extended to the borrower and / or other assets which are directly associated with the business / project of the borrower for which the credit facility has been extended. Collateral security means any other security offered for the said credit facility. For example, Pledge/hypothecation of jewellery, mortgage of house, etc.

Whether, any third party guarantee obtained for the credit facilities will make the account ineligible for

Yes, any third party guarantee (i.e. any other person / corporate not connected with the project) will make the account ineligible for guarantee

99

guarantee cover?

cover. However, borrower promoters, partners etc. is not a third party guarantee. In case loan is sanctioned to Private/Public Limited company, the guarantee of directors will be treated as third party guarantee.

Is it necessary that a borrower to be eligible should obtain all the required credit facilities from a single institution?

Yes, all credit facilities should be made available from a single institution. Credit facilities extended jointly by two or more banks to a single borrower or credit facilities extended jointly by two or more institutions to a single borrower, shall not be eligible for guarantee cover. However CGTMSE coverage is available in respect of credit facility extended by a commercial bank and SIDBI out of SIDBI's Micro and Small Enterprises Fund for North Eastern Region (NER)

Whether Co-financing to a MSE unit by Financial Institution with a Commercial Bank can be covered under the Scheme?

Yes, joint financing by a financial institution (e.g. SIDBI,NSIC, NEDFI) and Commercial bank can be covered under the scheme. For e.g. MSE unit is financed by term loan from State financial institution and Working capital from a commercial bank.

Guarantee will commence from the date of How long the guarantee cover is available for credit facilities extended to payment of guarantee fee and shall run through the agreed tenure of the term loan / composite a particular borrower? loans. Where working capital facilities alone are extended to eligible Borrowers, it would be for a period of 5 years or block of 5 years on renewal of the guarantee cover, provided Bank pays the Annual Service Fee as on March 31, latest by May 31 every year. Any renewal of guarantee cover beyond 5 years can be done on a payment of applicable guarantee fee.

What is meaning of amount in default under the scheme?

Amount in Default" means the principal and interest amount outstanding in the account(s) of the borrower in respect of term loan and amount of outstanding working capital facilities (including interest) as on the date of the account becoming 100

NPA or the date of lodgment of claim application whichever is lower or such of the date as may be specified by CGTMSE for preferring any claim against the guarantee cover subject to a maximum of amount Guaranteed.

NOTE: For formats given as per Annexure I to IV please refer to Circular No: NBG/SMEBUSMECFL/66/2010 - 11,November 16,2010.

It has now been decided, in supersession of all other related instructions issued in the past, to make all loans to Micro and Small Enterprises (MSEs) up to Rs. 25.00 lacs compulsorily collateral free, subject to these being found eligible for cover under the guarantee scheme of CGTMSE, except in cases where the borrower opts out of the scheme and provides adequate and acceptable collaterals.

e-Circular No. 360/3010 dated the 8th August 2010 issued by Credit Policy and Procedures Department (CPPD) it has been decided that the loans sanctioned to Micro & Small Enterprises up to Rs.1 crore that are eligible to be covered under CGTMSE scheme, will be exempted from obtaining any collateral security as stipulated in the Banks loan policy . The branches will however ensure that all necessaryconditions laid down under the CGTMSE scheme are strictly adhered to by them to safeguard Banks interest at all times.

101

TIE UP WITH APOLLO HEALTH AND LIFESTYLE LTD.

1.

Target Group

Proposed franchisees of Apollo Health and Lifestyle Ltd. projected to be around 200 clinics to be set up across the country in the next 12 to 18 months

Eligibility

A special risk model has been devised for assessing the eligibility of a proposed clinic based on which the proposals will be taken up for financing.

Purpose

To finance franchisees of Apollo Health and Lifestyle Ltd. for 102

setting up Apollo clinics as per the integrated model to offer Specialist consultation, Diagnostics, Preventive health checks, a 24 hour pharmacy, etc., all under one roof. 4 Type of facilities : Term Loan and Cash Credit

Quantum of Finance

No cap

Margin

33.33% for term Loan and 25% for Cash Credit

Rate of Interest

1.25% below SBAR floating with a minimum of 9% p.a. for both TL and CC. CGM of Circle has the discretion to reduce the interest rate to 1.25% below SBAR with a minimum of 8.50% p.a. with monthly rests for TL repayable in 7 years.

Security: - Primary - Collateral

Hypothecation of stocks and assets of the clinic

i)Collateral for a minimum of 50% of the Term Loan ii)Personal guarantees of promoters

Processing fees

0.25% of the TL and Rs.250/- per lac for CC limit

10

Repayment

Maximum of 20 quarterly instalments excluding a moratorium of 12 months from the date of first disbursement

11

Documentation

As per revised C&I documentation

12

Special features

Bank has entered into an MOU with Apollo Health and Lifestyle(AH&LL) to finance their franchisees for setting up integrated clinics. AH&LL will follow stringent due diligence procedure based on the following parameters ;Reputation of the key promoters Personal wealth and contribution as equity 103

Business acumen of the promoter Experience of the promoter in healthcare Population per clinic in the town Location of the clinic Proposals have to be subjected to risk analysis on the prescribed matrix and categorized into one of three categories namely, Extremely Satisfactory(A), Satisfactory(B) and Not satisfactory(C).A and B category proposals can be taken up for detailed appraisal as per CRA model on usual lines. Inspection to be undertaken at monthly intervals Insurance to be obtained for all assets financed by the Bank for full value and for all risks

Product Highlights:

This product is a unique package for increasing our exposure to the healthcare sector in a big way. The MOU with AH&LL envisages that the Apollo franchisees are chosen by AH&LL after stringent due diligence which will be shared with the Bank. Thereafter, the proposal will have to be vetted for Risk assessment on the specially designed format and only if found acceptable, the detailed appraisal will have to be taken up. Both TL and CC can be sanctioned as per need and if the CRA rating is at least SB4/SBTL4.

Marketing Tips: While the proposed Apollo clinics will provide ample scope for finance, the scope for cross-selling of our other products such as Import LCs, Insurance for equipment through our tie-ups with GIC, Mediplus schemes for eligible patients, etc.

FAQs

Can we entertain proposals directly without routing through AH&LL?

104

It is advisable to have the proposal vetted and recommended by the Apollo to enable them to do due diligence regarding the capability of the promoters to start such a clinic both on financial and technical aspects

Can we entertain proposals with the financials of the project being either for a lower value or higher value? Yes. The project will have to be checked for financial viability to ensure prompt repayment of instalments and interest.

State Bank of India ______________________ branch Application cum interview form for financing of Apollo Clinics
Name of the Unit

Address of the Unit Phone No. Fax No. Email / website Address of reg. Office In case of Corporate Address of the Unit Phone No. Fax No. Email / website Other services being provided Year of commencement of business Premises Owned / Rented Premises Owned / Rented Premises Owned / Rented

105

Experience in the line of activity Constitution Details of reconstitution in the past three years

Details of Proprietor / Partners / Directors Name & Qualification Age PAN Residential Address Ph No / Mobile Net Worth *

* Opinion report on the banks prescribed format should be prepared.

Details of existing banking arrangements :

Name of the Bank / branch

Facility

Limit

Outstanding

Banking since

106

Details of Associate / Sister / Identical Firms :

Name of the unit

Name(s) of pro/partners

Banking with

Limit

Outstandings

Details of registration under Shops & Establishment Act / Sales tax Act / Any other Act.

Position regarding Statutory assessment under IT / Sales tax / Any other Year upto which assessment completed.

Credit facilities required

Fund based Cash Credit (incl. of Bill / Chq purchases) Term Loan Total

Limit required

Non fund based Letters of Credit if any,

Limit required

Bank guarantees, if any Total

For term loans Details of assets to be acquired (pl. enclose detailed list if necessary) 107

Description

Details of the supplier

Cost

Time schedule for completion

Need for the proposed expenditure

Cost Land & Building Equipment (proforma invoice to be enclosed)

Amount

Means Own funds Other loans (specify source)

Amount

Other assets Total

Bank loan Total

Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc) Performance Parameters Post / projects Past three years 31.3 31.3 31.3 Sales / income Net Profit Depreciation Cash Accrual Tangible Net Projections

31.3

31.3

108

Worth TOL / TNW DSCR

For term loans, please enclose projected profitability statements covering the period of repayment

Details of Security offered Primary Collateral (i) Immovable property Name of the Owner Value of the property Basis of Valuation

Description of property

(ii)

Liquid securities Name of the owner Face Value When Acquired Present value

Description

Details of Guarantor Where applicable Name of the Guarantor & address Age Qualification Net worth Banking with

109

I/We declare that the information given in the application form are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me / us. I / we shall furnish all other information that may be required by bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards / action for recovery of bank dues including publication of defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I / We confirm that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me / us.

Signature of Borrower

Date : Place :

Name of the Interviewing Official

State Bank of India ______________________ branch Application cum interview form for financing of Apollo Clinics

Name of the Unit Address of the Unit Phone No. Fax No. Email / website Address of reg. Office In case of Corporate Address of the Unit Phone No. Premises Owned / Rented Premises Owned / Rented

110

Fax No. Email / website Other services being provided Year of commencement of business Experience in the line of activity Constitution Details of reconstitution in the past three years Premises Owned / Rented

Details of Proprietor / Partners / Directors Name & Qualification Age PAN Residential Address Ph No / Mobile Net Worth *

* Opinion report on the banks prescribed format should be prepared.

Details of existing banking arrangements :

Name of the Bank / branch

Facility

Limit

Outstanding

Banking since

111

Details of Associate / Sister / Identical Firms :

Name of the unit

Name(s) of pro/partners

Banking with

Limit

Outstandings

Details of registration under Shops & Establishment Act / Sales tax Act / Any other Act.

Position regarding Statutory assessment under IT / Sales tax / Any other Year upto which assessment completed.

Credit facilities required

Fund based

Limit required

Non fund based

Limit required

112

Cash Credit (incl. of Bill / Chq purchases) Term Loan Total

Letters of Credit if any,

Bank guarantees, if any Total

For term loans Details of assets to be acquired (pl. enclose detailed list if necessary)

Description

Details of the supplier

Cost

Time schedule for completion

Need for the proposed expenditure

Cost Land & Building Equipment (proforma invoice to be enclosed)

Amount

Means Own funds Other loans (specify source)

Amount

Other assets Total

Bank loan Total

Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc)

113

Performance Parameters Post / projects Past three years 31.3 31.3 31.3 Sales / income Net Profit Depreciation Cash Accrual Tangible Net Worth TOL / TNW DSCR Projections

31.3

31.3

For term loans, please enclose projected profitability statements covering the period of repayment

114

Details of Security offered

Primary Collateral

(i)

Immovable property

Description of property

Name of the Owner

Value of the property

Basis of Valuation

(ii)

Liquid securities

Description

Name of the owner

Face Value

When Acquired

Present value

Details of Guarantor Where applicable

Name of the Guarantor & address

Age

Qualification

Net worth

Banking with

115

I/We declare that the information given in the application form are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me / us. I / we shall furnish all other information that may be required by bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards / action for recovery of bank dues including publication of defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I / We confirm that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me / us.

Signature of Borrower

Date : Place :

Name of the Interviewing Official

116

State Bank of India ______________________ branch Application cum interview form for financing of Apollo Clinics

Name of the Unit Address of the Unit Phone No. Fax No. Email / website Address of reg. Office In case of Corporate Address of the Unit Phone No. Fax No. Email / website Other services being provided Year of commencement of business Experience in the line of activity Constitution Details of reconstitution in the past three years Premises Owned / Rented Premises Owned / Rented Premises Owned / Rented

Details of Proprietor / Partners / Directors Name & Age PAN Residential Ph No / Mobile Net Worth *

117

Qualification

Address

* Opinion report on the banks prescribed format should be prepared.

Details of existing banking arrangements :

Name of the Bank / branch

Facility

Limit

Outstanding

Banking since

Details of Associate / Sister / Identical Firms :

118

Name of the unit

Name(s) of pro/partners

Banking with

Limit

Outstandings

Details of registration under Shops & Establishment Act / Sales tax Act / Any other Act.

Position regarding Statutory assessment under IT / Sales tax / Any other Year upto which assessment completed.

Credit facilities required Fund based Cash Credit (incl. of Bill / Chq purchases) Term Loan Total Limit required Non fund based Letters of Credit if any, Limit required

Bank guarantees, if any Total

For term loans Details of assets to be acquired (pl. enclose detailed list if necessary)

Description

Details of the supplier

Cost

Time schedule for completion

119

Need for the proposed expenditure

Cost Land & Building Equipment (proforma invoice to be enclosed)

Amount

Means Own funds Other loans (specify source)

Amount

Other assets Total

Bank loan Total

Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc) Performance Parameters Post / projects Past three years 31.3 31.3 31.3 Sales / income Net Profit Depreciation Cash Accrual Tangible Net Worth TOL / TNW DSCR Projections

31.3

31.3

For term loans, please enclose projected profitability statements covering the period of repayment

120

Details of Security offered Primary Collateral (i) Immovable property Name of the Owner Value of the property Basis of Valuation

Description of property

(ii)

Liquid securities Name of the owner Face Value When Acquired Present value

Description

Details of Guarantor Where applicable Name of the Guarantor & address Age Qualification Net worth Banking with

I/We declare that the information given in the application form are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me / us. I / we shall furnish all other information that may be required by bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards / action for recovery of bank dues including publication of defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I / We confirm that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to 121

abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me / us.

Signature of Borrower

Date : Place :

Name of the Interviewing Official

APPRAISAL FORMAT FOR FINANCING FRANCHISEES OF APOLLO CLINICS


Proposals for financing of franchisees of Apollo clinics need to be appraised based on the Risk Parameters that are given below. The methodology of calculation of the score in the below mentioned risk matrix is :

Assign any one of the three codes (A, B & C) to all the considerations as above. A = Extremely Satisfactory. B = Satisfactory & C = Not Satisfactory

o o

The marks assigned to these codes are A = 10, B = 6 & C = 3 Calculate the total score of the risk matrix by multiplying weightage of each consideration with the marks of these codes (e.g. if a proposal gets B in location of the clinic then, 10%* 6 =0.6 mark would be given to the first consideration and accordingly the sum or all consideration will be calculated for the proposal).

1 Parameters

2 Considerations

3 Weightage

4 Code (A, B, C)

5 Score 3* 4

Location (30%)

Location of the Clinic Population / No. of polyclinics in the city or region

10% 20%

122

Owner (50%)

Reputation of the owner Personal wealth of the owner Previous business performance

25% 10% 15% 20%

Projections (20%) Total

Cash flow estimates

Based on the score achieved by every proposal, the collateral security is to be decided. Maximum score that can be achieved by a proposal is 10 and minimum score is 3. The calculation of collateral security to be made as under. Score received by the proposal 8 or more than 8 6 or more but less than 8% 4 or more but less than 6 Less than 4 Collateral security to be considered 50% of the term loan amount 75% of the term loan amount 100% of the term loan amount Term Loan not to be considered

The minimum collateral security stipulated is 50% of the Term Loan.

6. To set up a typical Clinic as envisaged by Apollo, the franchisee would be required to lease / own premises of around 3200 sq. ft. The total estimated cost of the project would be in the region of Rs. 170 lacs. The debt equity ratio desired is 1:1.

Project Cost of around Rs. 1.72 crore consisting of :

Lease Deposit Medical Equipment Interiors, Civil Modification, Furniture, AC, Electrical

4.80 70.60 45.00

123

Information technology (Hardware and Software) Preliminary and Pre-operative expense Working Capital Margin Contingency Funds and Others License Fees for AHLL (+10.2% service Tax)

12.00 13.00 3.00 3.50 20.00 Total 171.90

The revenue generation from Consultation, Health Checkups, Diagnostics Pharmacy and other facilities are expected to be Rs.140 lacs in the first years of operation. The turnover is expected to double in the 4th year. The cash break even is likely to take around 5/6 months while the expected payback period is 4-4.5 years with a post tax IRR of up to 25%.

7. There is an understanding with Apollo that all the applications will be processed within 10 days from the date of receipt of application and complete documents. Branches should ensure sanctity of the commitment made by the Corporate Centre with Apollo.

SBI Small and Micro Interest-free Loan as Equity (SBI SMILE)

SBI Small and Micro Interest-free Loan as Equity (SBI SMILE)

1.1 Objective:

The scheme envisages grant of interest free loan repayable over a long period to assist eligible professional and technically qualified entrepreneurs setting up new Micro and Small enterprises (MSEs) and units covered under the Banks Project Uptech for technology upgradation. The salient features of the scheme are us under: a). It should be a new unit i.e., the person approaching for interest-free loan as equity loan assistance (ELA) should be setting up his activity for the first time excepting in the case of units covered under the Banks Project Uptech programme where the units are already in operation.

1.2 Eligibility criteria

124

b).Equity assistance is provided only to persons genuinely not able to meet the necessary margins from their own resources. c). The entrepreneur must devote his direct and full attention to the unit. He should not be involved in any other unit in any capacity-proprietary or administrative. d). The entire borrowings should be confined to the Bank. e). The project should be eligible for assistance under any of the Banks Liberalised scheme. f). Professionals and Technically qualified persons for this scheme will cover doctors including dentists, engineers (diploma and degree holders), management graduates etc. g). The unit should be engaged in activities eligible for classification as Micro and Small Enterprises under MSME Act excepting retail trade. The investments in plant and machinery/ equipments of such units should also conform to the eligibility criteria of Micro and Small enterprises under the Act. h).The total cost of the project should be more than Rs.10.00 lacs. 1.3 Extent assistance: of Equity assistance up to a maximum of Rs.10 lacs for Micro and Small Scale industries and units under Project Uptech and Rs.5 lacs- for professionals and self-employed persons can be granted subject to a minimum of Rs.1.00 lacs for industrial units and Rs.50,000/- for professionals and self employed persons. Equity assistance should be in multiples of Rs.1000/- rounded off to the nearest thousand. Though request for second ELA to an eligible borrower for expansion of activity should not be entertained, during the process of implementation of the project, if there is any escalation in the project cost, additional ELA may be considered, subject to the above ceilings. 1.4 Computation assistance: of The actual amount of assistance to be granted under the Scheme, subject to the ceiling mentioned above, is the difference between the applicable margin and the capital contributed by the entrepreneur including seed capital and subsidy, if any. Minimum margin required is 15%. However, the capital contribution by the entrepreneur should not be less than 50% of the margin requirement as stated above.

1.5 Minimum contribution:

equity

Every entrepreneur will have to contribute a minimum share 7.5% of the cost of project as equity.

1.6. Application, appraisal and sanction:

No separate loan application form is required for assistance under the ELA as it is an integral part of the loan under the Bank's other schemes. A separate letter from the borrower requesting equity assistance should, however, be obtained. The procedure for appraisal and sanction is the same as in normal cases. However, techno-economic vetting may got done by Banks Consultancy Services Cell/external consultants. Control Return should be submitted to the Controlling Authority. The security available for other loans to the unit should be extended to cover equity assistance also. Funds lent under the Equity Loan Assistance Scheme will bear no interest. Other loans sanctioned to the unit will carry interest at normal rates prescribed by the Bank from time to time. In the event of misutilisation of the loan or non-compliance of stipulated terms, etc., the loan

1.7 Security: 1.8 Interest:

125

account for equity fund assistance would attract interest, at the Banks discretion, even for the entire period. 1.9 Documentation: 1.10 Repayment: 1.11 system: Accounting As per the Manual on Documentation. ELA can be repaid over a period of 3 years after an initial moratorium period of 5 to 7 years (during which period other term loans are repaid). Equity Loan Assistance will be sanctioned and disbursed in the same manner as Term Loans. Each ELA account should be styled as "M/s_ _ _ _ _ _ _ _ ELA A/c." and maintained along with other Medium Term Loan accounts. ELA may be disbursed in lump sum or in instalments, depending on the convenience of the unit as a Clean Term Loan. The component relating to the working capital requirement should be credited to the cash credit account of the unit. As the Bank would be disbursing the amount by way of a Clean Term Loan for a long period, the performance of the unit should be closely monitored. Assistance of the Bank's Consultancy Services Cell /Empanelled Consultants may be sought for vetting the project report and solving the problems, if any, faced by the unit. A return on Equity Loan Assistance on the prescribed format as given in Annexure-IA) should be sent at half yearly intervals to the Local Head Office who in turn would arrange to compile the return for the Circle and send a copy to Central Accounts Office and SME BU at Corporate Centre.

1.12 Disbursement:

1.13 Follow-up:

1.14 Reporting:

Annexure-IA

STATE BANK OF INDIA, _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ CIRCLE SBI Small and Micro Interest-free Loan as Equity (SBI SMILE) REPORT FOR THE HALFYEAR
ENDED 30T H SEPTEMBER/31S T MARCH

(Rs. In lacs)

Sl. No .

Name of the unit and its propriet-or / partners

Date of Sancti on

Tow n/ city whe re loca ted (4)

Product / Activity

Total project cost

Units contrib ution to equity

Assistance sanctioned under ELA

Total of other loans sanctioned by the Bank

Out side loans, if any

Rem arks

(1)

(2)

(3)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

126

Total sanctioned during the half-year : Rs. _ _ _ _ _ _ _ _ _ _ _ ( _ _ _ _units)

Cumulative sanctions under SBI SMILE: Rs. _ _ _ _ _ _ (_ _ _ _ _ _units)

Date:

ARTISAN CREDIT CARD

1.

Target Group

Artisans in the handicrafts sector and NOT covered by the government sponsored loan schemes. Minimum score of 60% under the simplified scoring model Preference to be given to artisans registered with the Development Commissioner (Handicrafts) Thrust to be to finance in clusters and preferably those supported by a Self Help Group (SHG) Existing borrowers with limits upto Rs.2 lacs and satisfactory track record are also eligible. For working capital requirements as well as cost of tools and equipment required for carrying out the manufacturing process.

Eligibility

Purpose

Type of facilities

A cash credit limit supported by a photo card which indicates the limit and validity and a passbook

Quantum of Finance

Maximum of Rs.2 lacs. Assessment to be made under Nayak Committee norms and will be based on the simplified Scoring Model. The minimum score to be obtained for being eligible for 127

finance is 60%

Margin

Upto Rs. 25000/Over Rs.25000/- and upto Rs.2 lacs

NIL 20%

Rate of Interest

Upto 50000/over Rs.50000/-

1.75% below SBAR 0.75% below SBAR

Security: - Primary - Collateral

: Hypothecation of assets financed by the Bank

NIL Credit Guarantee Fund Trust for micro and small enterprises covers loans under Artisan Credit Card. The fees for the same will be reimbursed by the Development Commissioner (Handicrafts, Ministry of Textiles, GOI through their Regional Directors. 9 Processing fees As applicable to SSI segment but no fees to be charged for review/renewal.

10

Repayment

The portion of limit used for purchase of tools, etc. may be made repayable in 3years. The rest of the limit will be a revolving cash credit limit to be reviewed every year but valid for 3 years subject to satisfactory conduct of account. : As per simplified SME documentation

11

Documentation

12

Special features

New units can also be financed Beneficiaries registered with the Development Commissioner (Handicrafts) will be eligible for insurance cover under group guarantee scheme for which the premium will be paid by the government and the beneficiaries in the ratio 60:40

128

13

Methodology Operation of account

and the

The beneficiaries of the scheme will be issued a photo ID card which contain name, limit and validity of the facility. A passbook will also be issued which will contain all details of the beneficiary including address, and all transactions will be recorded in it on an ongoing basis.

Product Highlights:

This scheme aims at providing adequate and timely assistance to the artisans to meet their credit requirements both for investments as well as for working capital in a flexible manner and at reasonable rate of interest. The facility will be extended by way of a revolving cash credit and the limit will be fixed based on the assessment made as per Nayak Committee norms. The assessment of the credit limit should include the cost of tools and equipment required. A photo ID card and a passbook will be issued and the limit will be valid for 3 years subject to annual review.

Marketing tips: The office of the Development Commissioner (Handicrafts) can provide a list of artisans registered with them. Preference should be given to these registered artisans for giving the artisan Credit Card. Clusters of artisans , especially those who are supported by a Self Help Group should also be preferred for offering this product. The borrower need not furnish any financial data and assessment has to be made based on the level of activity in the unit and other corroborative details.

FAQs
Can existing borrowers be given this facility? Existing borrowers under the Bank's are eligible for this scheme. However, beneficiaries of other government sponsored schemes are not eligible for this facility.

129

What is the margin to be stipulated for the credit limit?

Upto Rs.25000/-, no margin & over Rs. 25000/- , 20% margin has to be fixed.

SME CREDIT CARD

1.

Target Group

SSI units, tiny units, village industries, professionals, self- employed, etc..

Retail

traders,

2.

Eligibility

Customers of the following segments with a satisfactory track record for the last two years :Small industrial units Small retail traders Professionals self employed persons Small business enterprises Transport operators To meet any kind of credit requirements including purchase of shop Cash Credit and/or Term Loan Maximum - Rs. 10lacs 20% As applicable to the market segment Hypothecation of stock in trade, receivables, machinery, office equipment SSI No collateral is to be insisted upon

3.

Purpose

4. 5. 6. 7. 8.

Type of facilities Quantum of Finance Margin Rate of Interest Security: - Primary - Collateral

: : : : :

SBFFor loans more than Rs.25000/- charge over movable /immovable property/third party guarantee 9. Processing fees : As applicable to SSI/SBF units a) The working capital component should be reviewed every year provided the credit summation is not less than 50% of the projected turnover. If the credit summation is less than 50%, then a repayment schedule should be fixed for the outstandings in suitable monthly instalments. b) The Term Loan component should be repayable in a maximum of 5years in suitable instalments.

10. Repayment

130

11. Documentation 12. Special features

: :

As per the nature of the facility Assessment A scoring model has been designed and those units which score a minimum of 60% qualify under the Scheme for which the working capital assessment will be made as under :i) For small business, retail traders, etc., - 20% of their annual turnover OR - 20% of turnover of the last 12 months in their accounts, whichever is higher. For self- employed and professionals - 100% of gross annual income as declared in their income tax return For SSI units - As per Nayak Committee norms ie., 20% of annual turnover

ii)

iii)

Validity The limit will be valid for 3 years but is subject to annual review 13. Methodology Operation of account and : the The borrower will be issued a photo identity card indicating sanctioned limit and validity of the limit. Cheque book to be marked as SME Credit Card Pass Book to be issued Submission of stock statements is waived but should be obtained once in the last quarter to meet RBI stipulations Brief opinion report should be recorded.

Product Highlights: Small business units small industries in the tiny sector, retail traders, professionals and self employed persons, requiring working capital needs are very often unable to provide the elaborate financial data sought by banks from time to time for assessing their credit needs. To obviate this difficulty faced by the small units in SSI & SBF sectors, the Bank has designed this product which comprises of a photo identify card and a passbook which gives details of the limit and validity of the facility. The assessment is based on a simple scoring model and units which score 60% or more are eligible for this working capital cum term loan facility upto Rs.10 lacs valid for a period of 3 years.

Marketing Tips

131

This is a very user friendly product for any type of entrepreneur located in metro, urban, semi urban or rural areas. Small SSI units, retail traders, self employed professionals, small business enterprises etc., are the ideal target group. The limit being valid for 3 years for properly conducted accounts is a major plus point of this product. Stock statements are not required to be submitted except once a year.

FAQs
Can the limit be increased within the 3 year validity of the card ?

Yes. If the account has been conducted well and the unit requires a higher limit , then the limit can be enhanced subject to a maximum of Rs.10lacs. Can a Kisan credit card holder be given this card ? No. Any borrower is entitled to only one type of a credit card.

Application for SME / ARTISAN Credit Card


01. Name of the Unit

02.

Constitution

Proprietary Company

Partnership

03.

Address Business

132

Telephone No.

04.

Address Residential

Telephone /Mobile No. e-mail address

05.

Age of proprietor/Mng. Partner

18-30 Years 46 & above

31-45 Years

06.

Owning a House

Own (Not mortgaged)

Own

Not owning

07.

Academic Qualifications

Technical Graduate

Professional Undergraduate

08.

Spouse Detail

Employed

Not working

09.

Income Assessed Under IT

Yes

No

10.

Taken Life Insurance Policy

Yes

No

11.

Whether belongs

SC/ST Male

Minority Community ? Female

133

Ex-Serviceman

12.

SSI Registration Number (as given by DIC)

PAN No. / TAN

Business Details

13.

Description of Activity:

Dealing with business since:

14.

Project Details
Amount Means of finance

Rs. In lakhs Amounts

Cost of Project

Fixed Assets

Current Assets

Working Capital Term Loan Others

Total

Total

15. Track Record


Year 1 Sales Year 2 Year 3 Year 4 Year 5

134

Profit

16. Banking with SBI

Details of Deposit A/c

Since

Details of Advance A/c

Since

Loans Repaid

17. Marketing Arrangements :

Tie ups

Ancillary Units

Others

18.

TOL TNW

CA CL

19.

DSCR

20. Amount of Loan required

21. I / we certify
(i) (ii) all information furnished by me is true, correct and complete. I / we have no borrowing arrangement for the unit with any Bank except as indicted in the application. 135

(iii) (iv) (v) (vi) (vii)

(viii) (ix)

There are no overdues / statutory dues against me / us No legal action has been taken against me / us. The information may also be exchanged by you with any agency you may deem fit. I / we shall furnish all other information that may be required by Bank in connection with my application. You, your representative or any other agency as authorized by you may at any time inspect / verify my/our assets, books of accounts, etc., in our factory/business premises as given above. You may take appropriate safeguards / action for recovery of Banks dues including publication of defaulters name in website / submission to RBI. We further agree that my / our loan will be governed by the rules of State Bank of India which may be in force from time to time.

Place: Date: Signature of the Applicant.

Note: Documentary proof in the form of originals with self attested copies to be produced for verification. Originals to be returned and attested copies to be filed along with application.

136

APPRAISAL NOTE FOR SME CREDIT CARD (Quantum of Finance Maximum Rs.10.00 lakhs)

PROPOSAL FOR SANCTION OF 1. 2.

CREDIT SCORE: /60. (Minimum 36) 1.Name of the unit 2 Constitution Registration No. of the unit.( if applicable) 3.Name of the Proprietor/ Partners /directors 4. Business Address

(as per annexure-I)

Segment : SSI/SBF/C&I

Phone/Cell No. 5.Nature of activity 6. Banking with us from 7.Details of Limits as on date. (Rs.in lakhs) Existing Limits CC(Hyp) Proposed Limits CC(Hyp)

137

TL LC/BG Total indebtedness 8.Brief History (Brief bullet points only) (on Management, products, marketing tie-up etc.,) 1. 2. 3. 4. 5. 9.Project Details (If term loan is required) Project Cost Bank Loan Recommended

TL LC/BG

Rs. Rs.

(As per assessment in annexure-III) Debt /Equity10. Financial Position: Years 1 (Act.) Sales income Profit Profit/net sales Tangible Net worth TOL/TNW Current Ratio (Rs in lakhs) 2 (Act.) 3 (Est.) 4 (Proj.)

11. Working Capital Requirement

Working capital limit of Rs. Has been assessed as per the Projected turnover method (Nayak Committee method) as per the workings as on annexure-II.

138

12. Adverse remarks unattended in last Inspection & audit report, if any. 13. Whether borrower/ promoters figure as defaulters in CIBIL report for individuals. 14. Details of Associate concerns. Any NPAs 15. Terms & conditions i) Primary Security Hypothecation of plant & machinery purchased out of bank finance. Hypothecation of all kinds of Stocks & receivables. ( cover period for receivables ii) Collateral Security (not applicable if sanctioned under CGTFSI) iii) Guarantee Personal guarantee of Sri. (Indicate Net worth of Guarantors with date of compilation of opinion reports) iv) Margins v) Documents vi) Submission of Stock Statements vii) Validity viii) Insurance WC TL ----- days)

As per SME documentation To be submitted annually. Submit once in the last quarter of the year. WC loan is valid for 3 years, but is subject to annual review. Stocks/Equipment to be insured for full market value for all possible risks with bank clause. Quarterly/Half yearly.

ix) Inspection x) Repayment xi)Rate of interest xii) Upfront fees/Processing Charges

-------% above/below SBAR, effective rate;

139

xiii) Charges with ROC (If applicable)

16. Recommendations Recommended for sanction of Working Capital limit of Rs. Term loan of Rs. Total limit On the above terms and conditions. Signature Name Designation Date Enclosure: Applicants application & others Controlled by Signature Name Designation, Date Appraised & Assessed by Sanctioned by --------------

140

Annexure-I

SCORDING MODEL SME CREDIT CARD / ARTISAN CREDIT CARD


Sl. No. 1. Age Parameters Max. Marks 3 Marks Scored 18 30 31-45 46 & above 2. Owning House 3 Own (NM) Own (M) Not owning a house 3 Academic Qualification 5 Technical Professional / PG Graduates Less than Graduate 4. Experience In line of trade 4 More than 5 years 3-5 years 1-3 years Less than one year 5. Loyalty (Deposit / Advances) 3 Dealing with SBI More than 3 years 1-3 years Less than one year 6. Spouse Details 7. Assessed for IT 2 2 Employed Home-maker Assessed Not assessed 8. Has Life Insurance Policy 2 Yes No. 9. Track record of repayment of Personal loan 3 Prompt/No loan Irregular 3 2 1 2 0 2 0 2 0 3 3 2 1 3 2 0 5 4 3 2 4 3 2 1 Criteria Marks

141

10.

Continuous profits

Last 5 years Last 3 years Last year

5 3 1 5 3 1 3

11.

Sales show rising trend

Last 5 years Last 3 years Last year

12.

Marketing

Tie-up arrangement in operation Ancillary

2 Others 1 13. TOL./TNW 5 Less than 1 1 to 2 2 to 4 More than 4 14. CA / CL 5 More than 1.33 1 to 1.33 Less than 1 15. DSCR 5 More than 2 1.5 to 2 1 to 1.5 Less than 1 16, Routing of sales turnover through the account 5 100% 75% 50% <50% Total 60 5 4 3 0 5 3 0 5 3 2 0 5 4 3 1

N.B. In case any of the above parameters is not applicable, the scoring should be normalised out of 60.

142

Annexure-II

Name of the Borrower:

ASSESSMENT OF WORKING CAPITAL I. For SSI, SBF and Retail traders:

Projected Turnover Method (Nayak Committee Method) A. Estimated Sales for the Current year B. Working capital required (25% of A) Rs. Rs. Rs. Rs.

Eligible Bank Finance (80% of B) Bank finance Required

Working Capital Assessed/recommended is

II. For Self Employed and Professionals 50% of Gross annual income as declared in their Income Tax return.

III. Comments on Production aspects: (covering location advantages, availability of raw material and other utilities like water, power, fuel, labour etc.

143

IV. Brief Comments on Marketing Aspects:

144

Annexure-III

Name of the Borrower:

Assessment of Term Loan: 1.Project Details Rs.in lakhs. Project cost Cost Margin (%) Margin amount Required Finance Bank

Plant& Machinery Land &Buildings WC margin Contingencies Total project cost Means of finance Own funds Borrowings from friends and relatives Bank finance others Total means finance of

Debt /Equity-

2. Term Loan Assessment: Years 1 2 3

Rs.in lakhs 4 5 6

145

(Act) Net Profit Depreciation Cash Accruals Repayment obligations (including Interest) DSCR

(E)

(E)

(E)

(E)

(E)

Average D.S.C.R-

3. Details of machinery/equipment proposed to purchase:

4. Project implementation schedule:

146

Annexure-III-A (for SRTOs)

Name of the Borrower:

Term Loan assessment for Transport Operators (SRTO) Cost of Vehicle/s Borrowers Margin ( %) Rs. Rs. Rs.

Term loan recommended Assessment: Earnings 1

Total No. of Kilometers to be run per day (estimated)/ No. of trips per day Earnings per Km / earning per trip No. of working days in a month Total monthly earnings 1 x 2 x 3 ..A Expenses

2 3 4

5 6 7 8 9 10 11 12

Cost of Fuel per litre Quantity of fuel required per month Cost of fuel per month Monthly Wages / batta for driver / cleaner etc Maintenance Repair Insurance (annual premium / 12) MV Tax (annual tax /12)

147

13 14 15

Interest on borrowings Sustenance Other expenses Total Monthly Expenses (5 to 15).B

16 17 18

Monthly surplus . A - B Monthly TL repayment DSCR 16/17

Brief details of above workings:

148

ANNUAL REVIEW OF SME CREDIT CARD

PROPOSAL FOR REVIEW OF WC AND TERM LOAN SANCTIONED UNDER SME CREDIT CARD SCHEME. 1.Name of the unit 2 Constitution 3.Name of the Proprietor/partners/ /directors 4. Business Address Proprietorship/Partnership/Private limited Company

Phone/Cell No. 5.Nature of activity 6. Date of Last Sanction/review 7. IRAC Position as on 8. Present Position of Accounts as on date of review. (Rs. In lakhs) TL LC/BG Total indebtedness 9. Conduct of WC a/c (Rs. In lakhs) Annual Turn over estimated Rs. Facility CC Limit DP O/S Irregularity if any

Annual Credit Summations in the account Rs. (Atleast 50% should be routed in the account, other wise sanctioning authority has to take a view on continuation of facility) Value of the account: Rs.

149

(Interest/Exchange/commission Booked) Any Cross selling Products Booked : (Give the name of the product booked) 10.a) Whether earlier sanctioned terms complied with? b) Comments on nonachievement of estimated sales/profit. c)No.of times the account was irregular last year and reasons. 11.Comments (from risk angle) (On other associates, Competition, quality of products, I&A comments, CIBIL report for individuals etc., and other relevant to Risks. Bullet points only)

11. Recommendations The Conduct of WC loan and Term loan has been reviewed and found satisfactory. Recommended for continuation of Working Capital limit of Rs.

On the above terms and conditions as already set out in the original sanction dated (mention the date)

150

Appraised by Signature Name Designation Date

Approved by

SWAROJGAR CREDIT CARD

1.

Target Group

Self employed persons such as rickshaw owners, fishermen, handloom weavers, service sector for example, TV mechanics, and other micro-entrepreneurs, and SHGs.

Eligibility

Individuals or group of individuals engaged in any viable microenterprise. SHGs can also be provided with this facility jointly with the entrepreneur.

Purpose

For meeting the investment needs as well as the working capital requirements of self employed persons

Type of facilities

Composite Loan which comprises of a Term Loan and a revolving Cash Credit account. The borrower can avail the entire component as a TL or for working capital only as per the actual requirement, Rs. 25000/- per borrower as composite loan . This can be increased to Rs.30000/- in deserving cases. The initial investment in fixed assets and/or working capital requirement 151

Quantum of Finance

/recurring expenditure are to be taken as the basis for fixing the limit. The cash credit limit should be fixed based on the operating cycle to the extent of the available balance after fixing the TL component A component not exceeding 20% of limit can be can be built in for consumption purposes in view of the family's contribution in the productive activity. 6 Margin : NIL

Rate of Interest

As applicable under SIB segment

Security: - Primary - Collateral

: Assets acquired from Bank finance

NIL 9 Processing fees Waived

10

Repayment

TL is repayable in 5 years in suitable instalments Cash credit limit should be normally repaid in 12 months and renewed annually based on the conduct of the account and repayment of the Term Loan. If the CC account remains continuously irregular for 90 days or remains outstanding for 12 months, no further debits should be permitted.

11

Documentation

As per simplified SME documentation

12

Special features

13

Methodology Operation of

and the

The facility should be covered under the Group Insurance Scheme and the cost borne by the Bank and the borrower equally BMs have absolute freedom to select the borrowers for this product and there is government subsidy for this scheme Withdrawal from the account will be through a withdrawal slip or cheque. The SCC holder can be permitted to open a Savings bank account. The borrowers will be issued a laminated credit card and a passbook. This will as an identity card and to record the transactions on an ongoing basis. The passbook will contain the 152

account

repayment schedule of the term loan also. A passport size photograph of the borrower will be affixed on the credit card and the borrower will have to produce both the credit card and the passbook for withdrawal from the account. Self Help Groups(SHGs) can also be issued these cards and they will be jointly and severally liable for the amount. As far as possible cluster approach should be adopted for this product.

Product Highlights:

This is a product similar to the Kisan Credit Card. Self employed persons in activities other than agriculture in urban and other areas are eligible to apply for this product for meeting their investment or working capital requirements. The borrower will be provided with a photo ID card and a passbook which have to be produced at the time of each withdrawal from the account. SHGs can also be issued this card.

Marketing tips:

SHGs operating in the area of operation can be offered this product as it would have an element of group guarantee in such a case and improves the chances of repayment.

CYBER PLUS

153

1.

Target Group

Educated youth with basic computer knowledge especially in rural and semi-urban centres. Women entrepreneurs are to be given preference

2.

Eligibility

Educational qualifications minimum SSC or 10th std. passed Age between 18 and 45 years of age Should possess basic computer knowledge

3.

Purpose

To set up Internet/ Cyber cafes especially at rural and semiurban centres with potential for such a facility

4.

Type of facilities

Composite Loan

5.

Quantum of Finance

Rs.50000/-

Margin

Rs.9000/-

7.

Rate of Interest

0.75%below SBAR

8.

Security: - Primary - Collateral

: Hypothecation of the assets purchased from Bank finance NIL Can be brought under CGTSI scheme

Processing fees

Waived

10.

Repayment

36 to 40 monthly instalments

154

11

Documentation

As per SME documentation

12

Special features

N-Logue, a non profit organisation comprising of specialists from IIT Chennai has designed the "CHIRAAG" kiosk to be located at rural centres to provide e-governance and has entered into agreements with various agencies to enable these kiosks to provide communication, education, information about agriculture, health and other services. The role of n-Logue is as under:To identify, select and train the operators To provide logistic support and marketing Installation of equipment Provide internet connection Identifying usages and services To provide maintenance and insurance To interact with govt. departments to introduce and enhance the scope of e-governance To monitor the assets and undertake marketing of kiosk services To offer minimum buy back guarantee for the assets The scheme is presently introduced in Chennai, Mumbai, Hyderabad, Bangalore and Ahmedabad Circles. The total project will be around Rs.59000/-for purchase of PC, monitor, CorDET wireless system, UPS, printer, Internet registration, software, furniture, etc..

Product Highlights: As a step towards building the technological gap between the urban haves and the rural have nots, nLogue, an NGO comprising of members of IIT, Chennai, have come together to provide technical and logistic assistance to rural entrepreneurs for setting up internet kiosks christened "CHIRAG" at rural centres. The Bank, on its part, has evolved this product to provide finance for this project for individual entrepreneurs in rural centres. This can also be taken up under the KVIC schemes which will provide a subsidy of 25% to 30%. Generation of income for this project will be through providing basic internet services, tie-up with government departments for e-governance, for payment of statutory dues, for getting information regarding crop yields, market prices, agriculture inputs, educational facilities such as coaching for exams, obtaining results, marks lists, admission to professional college etc. Marketing tips:
Tie up with nLogue to market this product 155

Identify trained youth especially in rural and semi-urban centres and refer them to nLogue for further due diligence.

FAQs
What are the margin requirements for this scheme? The cost of the scheme has been estimated at Rs.59000/-. Of this, the maximum loan permissible under this scheme is Rs.50000/- . The rest will be the margin which has to be met either from own sources or from KVIC margin money scheme or any other scheme.

SME CREDIT PLUS

1.

Target Group

Existing SSI borrowers with excellent track record and have been standard assets for the past two consecutive years and also new borrowers.

2.

Eligibility

Units with CRA Rating of SB4 (old) & above or the equivalent under the new CRA and / or standard assets for the past two years For meeting bulk orders repairs to machinery Tax payments Any other contingency

3.

Purpose

4.

Type of facilities

Clean Cash Credit

5.

Quantum of Finance

20% of aggregate working capital limit subject to a maximum of Rs.25lacs

6.

Margin

Not applicable

7.

Rate of Interest

At the rates applicable for working capital limits

156

8.

Security: - Primary - Collateral

: Nil

Existing collateral to be extended to cover this limit and additional collateral to be obtained only if considered necessary by the sanctioning authority

9.

Processing fees

As applicable to SSI units

10. Repayment

Each amount of withdrawal should be repaid within 2 months. There should be a gap of 15 days between the last date of repayment of outstandings and the next withdrawal.

11. Documentation

As applicable to clean cash credit.

12. Special features

No cheque book to be issued

Product Highlights:

SME Credit Plus is a product designed to meet sudden and unforeseen expenditure of SSI units with excellent track record. Eligible units can be sanctioned an additional working capital limit of upto 20% of the aggregate fund based working capital limit by way of clean cash credit. Additionally, the product can be extended to new borrowers as a marketing tool to attract good borrowal units of other banks to our books.

157

Marketing Tips:

This product can be effectively used to attract borrowers of other banks with a good track record and potential for growth to our books. Borrowers of other Banks, especially those whose genuine needs are not being adequately met by their banks are the most likely target group for marketing of this product. The local District Industries Centre, Industry associations, trade bodies are some of the sources for providing information regarding "good units in the area".

STANDBY LINE OF CREDIT FOR WORKING CAPITAL REQUIREMENTS

1.

Target Group

Existing SSI & C&I units and exporting units.

Eligibility

Rated SB7 or its equivalent under the new CRA and above.

Purpose

To meet genuine contingency needs arising out of bunching of orders, delay in shipment / realisation of receivables, sudden increase in raw material costs, mis -match in cash flows.

Type of facilities

Working capital limit by way of cash credit, EPC, bills discounting, against stocks, receivables, etc., as required.

158

Quantum of Finance

Fund based limits and Non-fund based limits 15% of working capital facilities subject to a maximum of Rs.5 crs. The facility may be made available as fund based and/or non fund based limits subject to the overall exposure being within the SLC.(WC) In the case of consortium advances, only our share in the consortium should be reckoned for arriving at the quantum.

Margin

As per the terms of the original limits

Rate of Interest

One per cent higher than that applicable to the Cash Credit limit. Discretion to waive the additional cost rests with the controller.

Security: - Primary

: Drawing power should be available to cover the SLC(WC) limit

- Collateral

Available collateral should be extended to cover SLC limit also.

9 Processing fees NIL

10

Repayment

Generally, within 2 months at any one instance and can be availed any number of times in a calendar year.

11

Documentation

Documents should be obtained for the aggregate limits including the SLC (WC) In the case of consortium advances, the SLC(WC) should be covered by a separate document and charge registered with the ROC wherever applicable.

159

12

Special features

The SLC(WC) should not be used for special type of facilities such as EPCG,DPG, etc.. The sanction should be by the authority having financial powers for sanction of the aggregate limits including those under SLC(WC) SLC(WC) should be calculated separately for peak and non peak limits SLC(WC) limits, being contingent in nature will be out of the consortium arrangement Sanction for the SLC(WC) should be obtained at the time of sanction of regular limits for all regular borrowers and who are likely to avail this facility during the year. SLC(WC) cannot be extended to units who have utilized SME Credit Plus facility The release of the facility after due sanction should be approved by the branch head on each occasion

Products Highlights:

This product has been introduced at the instance of RBI for enabling the exporters to avail additional WC funds at short notice in times of urgent need. The maximum amount which can be given is 15% of FB limits and NFB limits subject to a maximum of Rs.5crs While a similar product namely, SME Credit plus is available for a contingent limit of Rs.25lacs only, this Stand by Line of Credit can be given upto Rs.5crores.

Marketing tips:

This product can be shown as an additional feature while marketing for SSI / C&I / export business. Our existing units can be given this facility at the time of renewal itself, so that at the time of need the unit can avail without loss of time.

GENERAL PURPOSE TERM LOAN FOR SSI SECTOR

160

1.

Target Group

Existing SSI borrowers with CRA rating of SB3 and above

Eligibility

Should have earned profits in each of the preceding 3 years The unit should not have a history of default The unit should be CRA rated unit with a minimum limit of Rs.25 lacs (as far as possible).

Purpose

Any general commercial purpose such as shoring up NWC, substitution of high cost debt, R&D, quality upgradation for ISO certification, etc.

Type of facilities

Term Loan

Quantum of Finance

Maximum of Rs.50lacs

Margin

Minimum of 25% for acquisition of assets, i.e., quantum of loan should be restricted to 75% of project cost.

Rate of Interest

As per CRA rating

Security: - Primary - Collateral

: Extension of Hypothecation charge over current assets and fixed

Extension of charge over existing collateral Obtention of additional collateral by way of tangible security to be explored Personal guarantees of proprietor/ partners / promoters to be invariably obtained

Processing fees

As applicable to SSI units

10

Repayment

In monthly /quarterly instalments

normally in 3 years,

161

extendable upto 5 years in deserving cases.

11

Documentation

Specially designed document on the lines of the Composite Loan Agreement

12

Special features

Term Loan to be disbursed in line with the approved purpose Loans , deposits, from friends and relatives can be treated as quasi-equity to arrive at TNW subject to undertaking from them that the amounts will not be withdrawn during the currency of the loan.

Product Highlights:

This product is similar to the Corporate Loan which has recently been extended for non- corporate borrowers. Our existing SB3 rated units which require funds for any purpose connected with the running of the unit can be offered this product provided the unit has been making profits for the last 3 years and is brought under CRA rating exercise. The maximum amount of loan which can be sanctioned is Rs.50lacs repayable in 3 to 5 years.

Marketing Tips:

The existing SB3 rated SSI customers are the target group. Generally, the SSI units tend to borrow from private financiers to tide over their immediate liquidity problems as availing this amount from the Bank ,even if eligible, would be time consuming. Hence, it would be in the interest of the Bank to advise such borrowers to replace their high cost debt from other sources with this loan at considerably lower cost to ensure continued profits for the unit

162

FAQs
Can both Corporate Loan and this loan be given to the same unit?

No. Depending on which product is more suitable, any one of these loans can be given.

OPEN TERM LOAN Manufacturing Sector


12. Target Group : SMEs in Manufacturing sector

13. Eligibility

Existing or new corporate or non corporate customers in SME manufacturing sector with credit ratings of SB7/SBTL7 and above. Units with SB10/SBTL10 can be considered selectively with administrative approval of CGM( Circle) Non customers also can be considered subject o fulfillment of take over norms and after due obtention of opinion reports from their existing bankers. Current Ratio and TOL /TNW should at acceptable levels DSCR should be at least 1.75

14. Purpose

Any genuine commercial purpose such as expansion / modernisation substitution of high cost debt of other banks / FIs Upgradation of technology Energy conservation systems Acquisition of software, hardware, consumables, tools, jigs, 163

15. Type of facilities 16. Quantum of Finance

: :

fixtures, etc. ISO and other such certifications Visits abroad for acquiring technology, finalizing deals, participation in fairs, market promotion, etc. Term Loans Maximum Rs.250lacs For amounts more than this, prior administrative approval from the CGM(Circle) is to be obtained and the sanction would have to be accorded by CCC 1

17. Margin 18. Rate of Interest

: :

10% uniformly As per the credit rating of the borrower linked to SBAR on floating rate basis Hypothecation of the machinery proposed to be purchased out of the Term loan

19. Security: - Primary - Collateral

Extension of charge over current assets, fixed Assets and other existing collateral Obtention of additional collateral should be explored In all cases, personal guarantees of the promoters of the unit have to be invariably obtained. In case of corporate borrowers, pledge of promoters equity should be explored

20. Processing fees

As applicable to the unit for term loans

21. Repayment

Generally not to exceed 3 years. May be extended upto 5 years selectively if considered necessary. Usual Term Loan Agreement for the TL limit to be obtained upfront and supported by exchange of suitable letters at the time of each disbursement

22. Documentation

23. Special features This is a unique facility of a pre-sanctioned term loan limit with the option of multiple disbursements for multiple purposes to be sanctioned along with the working capital limits. This facility is to be made available at our erstwhile 164

commercial network branches, industrial estate branches, SSI branches, which are headed by CMs and such other branches identified for the purpose by the CGM(Circle)/GM(Network) Other branches may get such loans processed and sanctioned by SECC/CPCs irrespective of the amount. Borrowers can utilize the facility on multiple occasions as per their needs. Each disbursal can be made by the branch manger without reference to the sanctioning authority The repayment for each term loan is to be calculated by reference to the date of the first drawdown Each disbursal should be supported by an exchange of letters between the borrower and the Bank. The sanction is valid for 12 months only from the date of sanction and any unutilized portion will lapse after 12 months. Each term loan has to be treated as an individual TL for accounting purposes. The discretionary powers are as applicable to term loans. There is no need to refer these proposals to the Consultancy cells for techno-economic viability study.

Product Highlights:

This is a unique facility, the first of its kind aimed at our existing units, both our customers, especially those who are rated high as well as those banking elsewhere to facilitate them to negotiate for acquisition of assets, etc. with the comfort of a presanctioned term loan limit. There is no need for routine references to the Consultancy cells for TEV study for this product.

OPEN TERM LOAN For Services Sector

24. Target Group

Hotels, Hospitals, Educational Institutions & Fleet Operators

25. Eligibility

Existing or new corporate or non corporate customers in SME manufacturing sector with credit ratings of SB7/SBTL7 AND

165

ABOVE. Units with SB10/SBTL10 can be considered selectively with administrative approval of CGM( Circle) Non customers also can be considered subject o fulfillment of take over norms and after due obtention of opinion reports from their existing bankers. Current Ratio and TOL /TNW should at acceptable levels DSCR should be at least 1.75 26. Purpose : Any genuine commercial purpose such as expansion / modernisation substitution of high cost debt of other banks / FIs Upgradation of technology Energy conservation systems Acquisition of software, hardware, consumables, tools, jigs, fixtures, etc. ISO and other such certifications Visits abroad for acquiring technology, finalizing deals, participation in fairs, market promotion, etc. Term Loans Maximum Rs.100lacs For amounts more than this, prior administrative approval fro the CGM(Circle) is to be obtained and the sanction would have to be accorded by CCC 1 29. Margin 30. Rate of Interest : : 10% uniformly As per the credit rating of the borrower linked to SBAR on floating rate basis Hypothecation of the machinery proposed to be purchased out of the Term loan

27. Type of facilities 28. Quantum of Finance

: :

31. Security: - Primary - Collateral

Extension of charge over current assets, fixed Assets and other existing collateral Obtention of additional collateral should be explored In all cases, personal guarantees of the promoters of the unit have to be invariably obtained. In case of corporate borrowers, pledge of promoters equity should be explored

166

32. Processing fees 33. Repayment :

As applicable to the unit for term loans Generally not to exceed 3 years. May be extended upto 5 years selectively if considered necessary. Usual Term Loan Agreement for the TL limit to be obtained upfront and supported by exchange of suitable letters at the time of each disbursement

34. Documentation

35. Special features This is a unique facility of a pre-sanctioned term loan limit with the option of multiple disbursements for multiple purposes to be sanctioned along with the working capital limits. This facility is to be made available at our erstwhile commercial network branches, industrial estate branches, SSI branches, which are headed by CMs and such other branches identified for the purpose by the CGM(Circle)/GM(Network) Other branches may get such loans processed and sanctioned by SECC/CPCs irrespective of the amount. Borrowers can utilize the facility on multiple occasions as per their needs. Each disbursal can be made by the branch manger without reference to the sanctioning authority The repayment for each term loan is to be calculated by reference to the date of the first drawdown Each disbursal should be supported by an exchange of letters between the borrower and the Bank. The sanction is valid for 12 months only from the date of sanction and any unutilized portion will lapse after 12 months. Each term loan has to be treated as an individual TL for accounting purposes. The discretionary powers are as applicable to term loans as usual. There is no need to refer these proposals to the Consultancy cells for techno-economic viability study.

Product Highlights:

This is a unique facility, the first of its kind aimed at our existing units, both our customers, especially those who are rated high as well as those banking elsewhere to facilitate them to negotiate for acquisition of assets, etc. with the comfort of a pre-

167

sanctioned term loan limit. There is no need for routine references to the Consultancy cells for TEV study for this product.

DAL MILLS PLUS

1.

Target Group

Dal mills

2.

Eligibility

Profit making existing units with CRA rating of SB4 and above

3.

Purpose

Acquisition of machinery / factory buildingfor modernization Working Capital needs

4.

Type of facilities

Term Loan / Cash Credit / LCs / BGs / SME Credit Plus

5.

Quantum of Finance

TL no upper ceiling , CC As per Nayak Committee norms for limit upto Rs.5crores

6. 7.

Margin Rate of Interest

: :

Cash credit 25%

Finer rates of interest are being offered for Dal Mills Plus as per circulars issued from time to time 8. Security: - Primary : - Hypothecation of assets created out of Banks finance - Upto Rs.5 lacs NIL - Collateral Above Rs.5lacs EM of property / tangible security for not less than 75% of the loan amount

168

9.

Processing fees

As per SSI norms

10. Repayment

TL to be repaid in 5 to 7 years excluding a maximum moratorium period of 12 months

11. Documentation

As applicable to SSI units

12. Special features

A simplified CRA rating system has been designed to suit the special characteristics of Dal Mills Loan has to be sanctioned to deserving units within 15 days of receipt of completed applications A special appraisal form has been designed to assess the credit needs of Dal mills

169

Product Highlights:
This is a product to help in proper assessment of the credit needs of the Dal mills which although a traditional activity has assumed a more complex format in view of the liberalization of import and modernization of the processing of various kinds of pulses. The simplified CRA model will help in taking into account the market practices and is customer friendly which will help in not only retaining our existing customers and meeting their credit and other banking needs more comprehensively but also in attracting new connections to our books subject to fulfillment of take over norms.

Marketing Tips:
Contact local Dal Mill Owners Association to obtain a list of all dal mills in the area Arrange a meeting of all dal mill owners to explain this exclusive product designed for them by the Bank.

FAQs
Can combined dal and flour mills be financed under this product? Yes provided the books are maintained to reflect the dals and the flour items Separately

DAL MILLS PLUS - CREDIT RATING SYSTEM


S.No. 1. Current Ratio Parameters >=1.15 >=1.13 <1.15 >=1.10 <1.13 >=1.05 <1.10 <1.05 2. TOL/TNW Ratio <=2.50 >=2.50 <3.50 >=3.50 <5.00 >=5.00 <6.00 >6.01 3. Gross average DSCR for all loans inclusive of the proposed term loan >=2 <2.00 >=1.75 Score 15 12 8 5 0 10 8 6 4 2 10 7

170

<1.75 >=1.50 <1.50 4. Interest and instalment obligation of cash credit and term loan(s) Timely repayment on due date Delayed payment upto 30 days Over 30 days

5 2 10 5 0

5.

Total sales : Inventory + sundry debtors

>= 4 times >=3times <4 times >=2 times <3 times >2 times

10 8 4 2 5 3 1

6.

Submission of stock statements, balance sheets, renewal data

Timely submission One month delay Irregular in submission

7.

Achievement of projected sales

>=85% < 75% >=50% <50% >=25% <25%

5 4 3 0

8.

Supported by tangible collateral security including 2nd change on fixed assets

Security coverage to total loan >=100% >=50% <100% >=25% <50% <=25% 10 8 4 2 10

9.

Operational experience in cash credit

Liability not exceeding DP / Limit Liability exceeded limit Occasionally. Excess drawal adjusted in time. Liability exceeded frequently and adjusted with some delay.

3 10. Compliance with terms and conditions of sanction Complied with promptly Complied with delay Not complied with 5 3 0

171

11.

Age of relationship with the Bank (Banking with us since.)

Above 5 years >3 years <5 years > 1year <3 years

5 4 2 5 4 2

12.

Age of the firm / Company#

Above 5 years >3 years <5 years >1 year <3 years

#Remarks a )Gross average DSCR for all loans (Sr. No. 3) will not be applicable in case the unit is not seeking term assistance. In such cases, the total score need to be normalized to 100. b) The higher age of the firm / company will reduce the chances of default. Consistent downfall in performance inclusive of profitability parameters should fetch a firm / company a score of 2 irrespective of the age of the firm/company.

Commercial Advances SSI Segment : Rice Mills Unit :

IRAC Credit Rating Date of last renewal

1.

Proposal for : (Please tick)

Renewal of working capital limits at the existing level


Renewal of working capital limits with enhancement Sanction of working Capital limits New Sanctioning Authority (CCC-I / CCC-II MECC / SECC / NWCC / AGM / CM / BM)

2.

Total indebtedness :

(Rs. Lakhs)

Nature of Facility

Existing

Proposed

Fund Based
Cash Credit (MT)

172

Cash Credit (Hypothecation) Cash Credit (Outward Bills Clean) Medium Term Loan Total (A)

Non Fund Based


Letters of credit Bank Guarantees Total (B) Grand Total (A+B)

3.

Borrower

a) b) c) d) e)

Name Factory at Constitution Date of Partnership deed Name & Worth of Partners

: : : : : Partnership

S.No. 1. 2. 3. 4. 5. 6. 7.

Name

Worth in Rs. Lakhs

173

8. 9. 10.

f) g)

Products manufactured / processed Date of commencement of Commercial production

: :

h) i) j)

Dealing with SBI since Whether the firm has power to borrow Names of authorized signatories

: : Yes / No.

(If applicant is other than a partnership, please alter the columns suitably)

4.

Brief History :

5.

Production facilities : As per Annexure I

6.

Key Financial Indicators :

Actuals 31.3. Sales Rice - levy (FCI) Quantity (Quintals) Value Rice - levy (APSCSC) Quantity (Quintals) 31.3

Estimates 31.3.

Projections 31.3

174

Value Rice - Non Levy Quantity (Quintals) Value Brokens Quantity (Quintals) Value Bran Quantity (Quintals) Value Husk PURCHASES Quality wise Quantity (Quantals) Value Gross Profit Net Profit Tangible Net Worth Current Assets Current Liabilities Net Working Capital Current Ratio TOL / TNW Current Year Sales from 1 April to 30 September
st th

7.

Comments on the financial position / indicators :

175

Sales

Net Profit

Annex - I
Production facilities :

Owned Capacity of Rice Mills (Tons per hours) Number of shifts per day Total No. of working days Total Annual Capacity

Leased

176

For the Leased Capacities :

Name of the Owner


Date of Lease deed Valid up to Whether the lease rights Assignable

:
: : : Yes / No.

Clauses detrimental to the


Banks Interest if any II. Storage Capacity :

Milling Hall
Open Yard

:
:

Godown Owned
Rented Total Storage capacity

: :
: :

For Rented Godowns


Whether rent letter obtained : Yes / No.

Assessed Quantity of
III. Production (Projected for the current year)

Levy Paddy proposed to be milled (Quintals) Production (in Quintals) Rice Brokens Bran Husk

Non Levy

Total

177

Total

IV. Sales (Projected for the Current Year)

Levy

Non Levy

Total

Rice Brokens Bran Husk Total

Monthly Turnover (in Rs. Lacs) for the last twelve monthas)

Month Turnover

10

11

12

V. Utilities :

Required Power Transco Generator Water Labour

Available

178

VI.

Licenses / Statutory Dues / Litigation

SSI Registration Number Position regarding Statutory dues Income Tax Sales Tax Any Pending suits against the unit by the Government Departments / Corporations Yes / No. If Yes, furnish the particulars on a separate sheet) Whether all the required licenses are obtained and kept on Record Yes / No. If Yes, furnish the particulars on a separate sheet) Associate Concerns if any and the position of accounts Assessed upto Assessed Value

I
Units Name Date of Sanction Limit (Rs. Lakhs) D.P. (Rs. Lakhs) O.S. (Rs. Lakhs) IRAC Status

II

III

179

VII. Commercial Data


Before Last Year Levy Quota allotted* (Quintals) Levy sales (Quintals) Levy Sales (Value) Non-Levy sales (including brokens, bran and husk etc.) value Maximum Drawings at any one time Interest Income* Other Income Last Year Current Year (Proj.)

* Expected, If order is not yet received (Enclose copy of the present order issue by the competent authority. If the present one is not yet received, enclose previous years order)

Overall Risk Level

Score out of 100

Credit Rating Awarded

Asst. / Deputy Manager (Appraiser)

Branch / Chief Manager (Assessor)

ARTHIAS PLUS
1. Target Group : Commission agents (Arthias) of agricultural produce who are registered with the Market Committee and possess a license issued by the District Food and Supplies Department to sell the produce of the farmers.

180

Eligibility

Commission agents enjoying good reputation and who have been in this business for at least the past 3 years and holding a valid license to carry on his activity. Commission agents having receivables from farmers only.

Purpose

To finance commission agents against receivables from farmers.

Type of facilities

Cash Credit ( Hypothecation of book debts not more than 6 months old)

Quantum of Finance

Maximum Rs.25lacs

Margin

40%

Rate of Interest

AGL/SBF Segment 0.5% below SBAR for limits below Rs.2lacs At SBAR for limits of Rs 2lacs and upto Rs.10lacs

Under C&I segment (Above Rs.10lacs & upto Rs.25lacs) 1.10% to 2.50% above SBAR based on CRA Rating

Security: - Primary - Collateral

Hypothecation of receivables and movable assets if any EM of non-agricultural property, either residential or commercial belonging to the borrower or guarantor for 1.5 times the loan amount.

Processing fees

As applicable to the segment

181

10

Repayment

To be liquidated within 6 months and to be renewed annually

11

Documentation

As per simplified SME documentation

12

Special features

A statement of eligible receivables should be obtained from the borrower and verified with books of account or audited financial statements.

At the end of every cropping and marketing season, the borrower should liquidate the outstandings fully The limit should thereafter be subject to review/ renewal as per trade advance norms.

Product Highlights:

Commission agents have established themselves as a strong link between the farmers and the markets for their produce. These commission agents provide finance for the farmers for their cultivation needs and act as agents to sell their crop at harvest time. They charge commission of 1 to 2% which is recovered from the buyer of the produce. These agents are registered with market committees. The records of produce brought by the farmer and auctioned in the market yard are maintained by the marketing board. Our product "Arthias Plus" provides finance to these commission agents otherwise known as "arthias" against their receivables of not more than 6 months old, from farmers only. The credit is extended by way of cash credit (hypothecation of book debts and assets) upto a maximum amount of Rs.25 lacs.

This is to be treated as indirect finance to agriculture.

Marketing Tips:

182

The marketing committees will be able to provide details of registered "arthias" (commission agents) who should be contacted personally to sell this product. This is a valuable tool to increase bank credit to rural areas and will greatly assist in marketing of agricultural produce.

FAQs

Can unregistered Arthias be financed?

No. Only those commission agents who are registered with the market committees are eligible for finance under this scheme.

What about those States where this system of registration is not in vogue?

In such cases, this scheme is not applicable. Instead, any other scheme such as advance against mortgage of immovable property can be considered on merits.

WORKING CAPITAL FINANCE TO T&S SECTOR

1.

Target Group

.Retail and wholesale traders in agricultural and industrial commodities, Dealers in consumer durables, consumer goods, vehicles, showrooms, etc.

183

Eligibility

Units in C&I segment established with profits at least in the preceding 3 years with CRA rating of SB4 and above

Purpose

Working capital requirements

Type of facilities

Cash credit limit with a sub-limit for LCs if required

Quantum of Finance

15% of projected annual turnover which should not be more than 25 % of the turnover in the previous year subject to a maximum of Rs.5 crores.

Margin

25%

Rate of Interest

As per credit rating. A concession of 0.50% may be offered for units with at least 75% collateral coverage

Security: - Primary - Collateral

: Hypothecation of stocks and receivables

Collateral security of at least 50% is to be prescribed out of which at least 33% of the limit should be by way of mortgage of immovable property. The stipulation regarding immovable property can be reduced to 25% in exceptional cases with the administrative approval of CCC-II.

Processing fees

As applicable to C&I units

10

Repayment

On demand

184

11

Documentation

As per simplified SME documentation

12

Special features

In case the proposal does not fit into the turnover based model of credit assessment, the traditional method of projected balance sheet method may be adopted.

Product highlights:

As a measure to improve credit flow to the Trade & Services sector, a financial model based on the annual turnover rather than on inventory build up has been designed . As per this model , a credit limit equal to 15 % of the projected annual turnover can be fixed subject to the projection being not more than 25% increase in the actual turnover of the immediately preceding year. A margin of 25 % has to be maintained and the drawing power has to be regulated based on the stock statements.

Marketing tips:

Traders, both wholesale and retail, are the target group. The rates of interest charged by the Bank are much lower than the rates at which most of the traders avail finance from the private financiers or from the suppliers. The collateral to be taken is only 33% if the applicant is an established profit making enterprise with CRA rating of SB4. Interest concessions can be offered if the collateral offered is more than 75% of the loan amount.

FAQs

Can the borrower be granted higher limits than what is arrived at under the Turnover method? Yes. In such cases the assessment has to be made under the Projected Balance Sheet method.

185

FLEXI LOAN FOR TRADE AND SERVICES

1.

Target Group

8. 9. 10. 11. 12. 13.

Wholesale and retail traders in agricultural or industrial commodities Distributors and stockists of industrial products , consumer durables, consumables , etc. Export / import intermediaries Tourism related facilities-Hotels/resorts/travel agents, etc. Large transport operators of passenger buses/fleet owners Construction, transport & supply contractors, Hospitals, nursing homes, clinical labs, etc.,

Eligibility

Borrowers with CRA rating of SB10 or SBTL10 and above only are eligible and should have earned cash profits in each of the preceding 3 years and net profit in the last year. Only established traders with proven record of profitability are eligible.

Purpose

The loan can be considered for any general purpose such as Holding of stocks/book-debts Acquisition of land and building Construction/renovation of office/showroom Purchase of vehicles, equipment, machinery Shoring up of net working capital Term loan

Type of facilities

Quantum of Finance

Rs.5 lacs to Rs.100 lacs. In the case of extending this term loan for working capital purposes, a limit of upto 15% of the assessed WC limits can be considered for meeting contingencies , subject to availability of drawing power. Minimum DSCR to be 1.50.CRA Trade model to be used for limits above Rs.25 lacs. Minimum 25% of the expenditure

Margin

Rate of Interest

Linked to CRA rating for limits above Rs. 25 lacs. For others, SBF rates are applicable.

186

Security: - Primary

Hypothecation of current assets and EM of land and building if acquired from Bank finance 1. Tangible security by way of immovable property, TDRs, NSCs, etc for a minimum of 35% of the loan for those with a satisfactory track record of 3 years. For others, minimum collateral should be 50% . 2. Personal guarantees of promoters/partners/ proprietor As applicable to C&I units In 3 to 5 years This can be extended upto 8 years in deserving cases.

- Collateral

9. 10

Processing fees Repayment

11

Documentation

As per simplified SME documentation

12

Special features

RBI guidelines on selective credit control will apply Audited Balance Sheet to be obtained as per extant instructions Exposures under Multiple Banking Arrangement may be explored selectively to facilitate take-over of quality assets.

Product Highlights:

This is a term loan facility repayable in 3 to 5 years extendable upto 8 years, designed taking into account the special requirements of the trade and services sector. The eligible activities for this product are: 1) 2) 3) 4) 5) 6) 7) Wholesale and retail traders & distributors of agricultural & industrial commodities Departmental stores and supermarkets Export/ import intermediaries Large transport operators of passenger buses and goods. Construction, transport, supply, public utility / maintenance contractors Tourism related facilities Hotel / travel agencies Hospitals, nursing homes, clinical labs etc.
187

Borrowers with CRA rating of SB10 or SBTL10 under CRA-Trade model are eligible for this product. Gross DSCR should be minimum 1.50 and TOL/TNW not beyond 4and total long terms liabilities to equity should not be more than 2:1 and current ratio should be at least 1. The maximum amount of TL which can be granted under this scheme is Rs.100 lacs.

Marketing Tips:
Almost anyone involved in trade or service can be offered this facility which can be used for any general purpose connected with their line of activity.

All small and medium sizes enterprise in the area of operation can be targeted for this product.

SBI SHOPPE
1. Target Group : Present and prospective owners of shops/ offices/ show-rooms/ training centres/ service centres/ garages/ offices for Chartered Accountants / Consultants

2.

Eligibility

Individuals /firms / partnerships / trusts / franchisees

3.

Purpose

Purchase of new / old shops/ establishments / offices / dealer's showroom etc. Repairs / renovation / modernisation Furniture / fixtures / electrical fittings /accessories for the shop/office etc.

4.

Type of facilities

Term Loan

5.

Quantum of Finance

Maximum of Rs.20 lacs

188

6.

Margin

25% and 40% for purchase of old premises

7.

Rate of Interest

As applicable to SIB TLs below Rs.25 lacs

8.

Security: - Primary - Collateral

: Hyp. / pledge / mortgage / assignment of the assets purchased out of Bank's finance

9.

Processing fees :

As applicable to SSI / SBF units 3 to 7 years excluding a maximum moratorium period of 6 months

10. Repayment

11. Documentation

As per simplified SME documentation

12. Special features

No Objection Certificate and No Lien Letter to be invariably obtained from the owner-lessor of the property in the case of rented property Repayment period should be well within the lease period in the case of rented property. Opening of SB / Current Account is mandatory DSCR to be minimum 1.75 Property on hire purchase/ lease from departments /PSUs should not be financed govt.

189

Product Highlights:

This is a unique product aimed at the trade sector for purchase /modernisation/ expansion / upgradation of shops dealer/show rooms, franchisees, repair centres / Garages / buildings for professionals etc. upto Rs.20 lacs by way of a term loan repayable on easy terms.

Marketing Tips:

Shopping complexes / malls are ready source of business for this product. Traditional shopping / business areas in towns and cities can be a source for marketing this product for renovation and facelifting. Takeover of similar loans extended by other banks can be considered subject to fulfilment of take over terms.

FAQs

Can this loan be given if the shop premises is owned by a close relative of the owner of the shop who has applied for the loan?

Yes. Often the premises is in the name of the father or the wife of the applicant. The loan can be given in such circumstances also subject to obtention of usual no objection/ no lien letter from the owner of the property.

Can this loan be extended to travel agents for setting up an office?

Yes. This facility can be extended to those engaged in services such as travel agencies, caterers, hotels, eateries, beauty salons, etc.

SBI SHOPPE PLUS

190

13. Target Group

Present and prospective owners of shops/ offices/ show-rooms/ training centres/ service centres/ garages/ offices for Chartered Accountants / Consultants

14. Eligibility

Individuals over 21 years of age with a steady source of income and possessing necessary approvals for construction of proposed structure

15. Purpose

This product is a combination of Housing Loan and SBI Shoppe. The applicant is expected to first apply for a housing loan and on completion of the house he becomes eligible for a term loan on the lines of SBI Shoppe for setting up an office / shop for purchase of furniture, equipment , etc.

16. Type of facilities

2 Term Loans

17. Quantum of Finance

1st term loan as per housing loan scheme and second term loan for 75% of cost of setting up office / shop

18. Margin

1st term loan - as per housing loan 2nd term loan - as per SBI Shoppe 25%

19. Rate of Interest

1st term loan - as per housing loan 2nd term loan as per SBI Shoppe less 0.25% if eligible under SBI Credit Khazana

20. Security: - Primary

Hypothecation of the assets purchased out of Bank's finance and EM of land building for 2nd and 1st term loans respectively Extension of EM for 2nd term loan

- Collateral

191

21. Processing fees

As per housing loan for 1st term loan As applicable to SSI / SBF units for 2nd term loan

22. Repayment

As per housing loan for 1st term loan As applicable to SBI Shoppe for 2nd term loan

23. Documentation

As per housing loan for 1st term loan As applicable to SBI Shoppe for 2nd term loan

24. Special features

This is a combination of housing loan scheme and SBI Shoppe for the use of professionals such as Chartered Accountants lawyers, consultants,

Product Highlights:

This is a unique product aimed at the services sector for purchase of office cum residence for professionals etc. Credit can extended by way of a term loans repayable on easy terms.

Marketing Tips:

The local chapter of the Institute of Chartered Accountants of India would provide a list of chartered accountants who are in practice. They could be contacted individually or by holding a seminar or meeting for them to explain the features of this unique scheme which also has substantial tax benefits.

EXPRESS VENDOR DISCOUNT SCHEME

192

1.

Target Group

Vendors of reputed Corporates and industry majors

Eligibility

COCC I will accord administrative clearance for selection of industry majors(IMs) whose vendors become eligible for this facility

Purpose

To finance specific receivables against goods / services supplied to the identified industry major

Type of facilities

EVDS limit for 1 year renewable on case to case basis

Quantum of Finance

The aggregate of the EVDS limits for an IM will be given by the COCC I. The individual limits for the vendors will be given by CAG The period of credit will be stipulated by the COCC I .

Margin

Generally nil

Rate of Interest

Will be approved by the COCC I

Security: Primary

Generally unsecured.

- Collateral 9 Processing fees As applicable to C&I

10

Repayment

IM has to pay on due date of each receivable but Bank has recourse to vendor in case of default by the IM : Specially designed by the Law department

11

Documentation

193

12

Special features

The advance is self liquidating in nature As part of supply chain financing the Bank is providing relief to the industry majors in better management of their funds. The products have low risk profile

PRE SHIPMENT EXPRESS VENDOR SCHEME

1.

Target Group

Vendors of reputed Corporates and industry majors

Eligibility

COCC I will accord administrative clearance for selection of industry majors(IMs) whose vendors become eligible for this facility

Purpose

To finance Working capital needs against purchase orders from Industry Majors EVDS limit for 1 year renewable on case to case basis

Type of facilities

194

Quantum of Finance

The aggregate of the EVDS limits for an IM will be given by the COCC I. The individual limits for the vendors will be given by CAG The period of credit will be stipulated by the COCC I .

Margin

Generally nil

Rate of Interest

Will be approved by the COCC I

Security: Primary

: Generally unsecured.

- Collateral 9 Processing fees As applicable to C&I

10

Repayment

IM has to pay on due date of each receivable but Bank has recourse to vendor in case of default by the IM

11

Documentation

Specially designed by the Law department

12

Special features

The advance is self liquidating in nature As part of supply chain financing tne Bank is providing relief to the industry majors in better management of their funds. The products have low risk profile

195

FINANCE TO RESTAURANTS

Particulars Target Group

Details Owners of

Restaurants Eligibility Individuals (proprietorships)

Partnership firms

Purpose

For purchase of Kitchen equipments Corporates

For investment in Interior decoration

Nature of facility Tenure of Loan

Term loan or overdraft. and fixtures For purchase of furniture Repayment period of up to 7 years when land and building cost included in loan, otherwise 5 years. Investment in the Restaurant for the aforementioned purposes less margin / promoters contribution which ever is lower. Hypothecation / Pledge of the assets financed by the Bank

Quantum of

finance Security

Primary

Extension of charge over current assets, Fixed assets and other existing collateral if any Obtaining additional tangible security such as immovable property, bank deposits, etc. is to be explored wherever possible In all cases personal guarantees of proprietors/partners/promoters to be invariably obtained

Collateral

Margin

25%

196

Insurance

All the assets financed by the Bank and the collateral security is to be fully insured as per extant instructions. The interest rates on the scheme, for new restaurants and takeovers from other Banks and financial institutions will be applicable as per the table below, related to the score obtained by an application in the rating through the credit evaluation matrix. New cases Score > 75 Between 65 and 75 Between 50 and 65 < 50 Rate of interest SBAR (10.25%) SBAR + 1% (11.25%) SBAR + 2% (12.25%) Not eligible

Rate of interest

Takeover cases Score > 75 Between 60 and 75 < 60


Current SBAR 12.25%

Rate of interest SBAR (10.25%) SBAR + 1% (11.25%) Not eligible

Inspection

Monthly by the Field Officer and quarterly by the Divisional Manager /Branch Manager as per extant instructions for trade advances. In cases of loan of more than Rs.25 lacs for a new restaurant, the authority one level higher than the sanctioning authority will have the power to reduce the interest rate by up to a maximum of 1.00% based on competition. Similarly, in takeover cases, of loans more than Rs.25 lacs the authority one level higher than the sanctioning authority will have the power to reduce the interest rate by up to a maximum of 1.00% based on competition.

Discretionary

powers

197

CREDIT EVALUATION GRID FOR NEW RESTAURANTS

Category (weight) Factors

Location (20%)

Accessibility Purchasing power of population Competitive intensity

10 5 5

5 2 2

0 0 0
Working Draft - Last Modified 2/3/2005 3:28:24 PM

Novelty value and sustainability over long Novelty (10%) term

10

Printed 1/31/2005 11:40:06 AM

Restaurant industry experience Owner (20%) Proportion of equity

10 10

5 5

0 0

Collateral (20%)

Loan to collateral ratio 198

20

10

Debt coverage Repayment capability (20%)

20

10

Brand Image 10%

Brand image

10 5

199

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (1/3)

Category

Condition

Points

Location Easily accessible / located on ground floor along main road Requires effort to access (far from population, inside a building, commercial complex etc.) Difficult to access / located in interior or side lane 5 2 0
Working Draft - Last Modified 2/3/2005 3:28:24 PM

Accessibility*

Purchasing power of target segment

Affordable for target segment on normal occasions Affordable for target segment only on special occasions Beyond the purchasing power of target segment

5 2 0

Printed 1/31/2005 11:40:06 AM

Competitive intensity

Low Few restaurants for target segment Medium Limited number of restaurants for target segment High Large number of restaurants for target segment

5 2 0

Novelty

Novelty value and sustainability over long term Novel concept that is sustainable over long term Concept novel but can be easily copied Me too no novelty in the concept 200 10 5 0

* Restaurants with novelty value/brand and easy accessibility can attract customer from all across the city. Me too restaurants will mainly attract customers from nearby localities and location on main road is a great advantage

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (2/3)

Category

Condition

Points

Owner

Restaurant industry experience (as owner or key person)

>= 3 years >= 1 years < 1 years

10 5 0

Debt/equity <= 1 Proportion of personal equity Debt/equity <= 1.5 Debt/equity > 1.5

10 5 0

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID (3/3)

201

Category

Condition

Points

Collateral

Loan to collateral ratio

>= 50% >= 25% < 25% and >10%*

20 10 0
W orking Draft - Last M odified 2/ 3/ 2005 3: 28: 24 PM Print ed 1/ 31/ 2005 11: 40: 06 AM

Repayment capability Debt service coverage (compare sales estimate with sales of similar restaurants in region) >= 2 >= 1.5 < 1.5 20 10 0

Brand

Reputed chain of restaurants in region At least one well known restaurant Brand image Unknown

10 5 0

* Minimum collateral is 10% below which proposal will be rejected

202

203

CREDIT EVALUATION GRID FOR RESTAURANTS TAKEOVER CASES Score

Category (weight)

Factors

Accessibility Location (10%) Competitive intensity

5 5

2 2

0 0

Restaurant industry experience Owner (20%) Proportion of equity

10 10

5 5

0 0

Collateral (20%)

Loan to collateral ratio

20

10

W orking Draft - Last Modified 2/ 3/ 2005 3: 28: 24 PM

Debt coverage Repayment capability (10%)

10

P rint ed 1/ 31/ 2005 11: 40: 06 A M

Track record (20%) Track record of payment of loans 20 0

Profitability of operations (10%)

Profitability

10 204

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID TAKEOVER CASES (1/3)

Category

Condition

Points

Location Easily accessible / located on ground floor along main road Requires effort to access (far from population, inside a building, commercial complex etc.) Difficult to access / located in interior or side lane 5 2 0

Accessibility*

Working Draft - Last Modified 2/3/2005 3:28:24 PM Printed 1/31/2005 11:40:06 AM

205

Competitive intensity

Low Few restaurants for target segment Medium Limited number of restaurants for target segment High Large number of restaurants for target segment

5 2

Profitability of operations

Profitability**

Positive profit Loss making

10 0

* Restaurants with novelty value/brand and easy accessibility can attract customer from all across the city. Me too restaurants will mainly attract customers from nearby localities and location on main road is a great advantage ** If restaurant has been in existence for < 1 year projections based on available sales figures may be used to assess profitability 6

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID TAKEOVER CASES (2/3)

Category

Condition

Points

Owner

206

Restaurant industry experience (as owner or key person)

207

>= 3 years >= 1 years < 1 years

10 5 0
Working Draft - Last Modified 2/3/2005 3:28:24 PM

Proportion of personal equity Debt/equity <= 1 Debt/equity <= 1.5 Debt/equity > 1.5 10 5 0

Printed 1/31/2005 11:40:06 AM

DETAILED CRITERIA FOR PARAMETERS IN EVALUATION GRID TAKEOVER CASES (3/3) Category Condition Points

Collateral

Loan to collateral ratio

>= 50% >= 25% < 25% and >10%*

20 10 0

W orking Draft - Last Modified 2/3/2005 3:28:24 PM Printed 1/31/2005 11:40:06 AM

Repayment capability Debt service coverage (compare sales estimate

with sales of similar restaurants in region)

208

>= 1.5 >= 2 < 1.5 10

5 0

Track record of repayment Satisfactory track record of repayment of term loans obligation Default on repayment of term loan obligation 0

Term loan repayment history

30

* Minimum collateral is 10% below which proposal will be rejected

209

Application cum Interview form

State Bank of India Branch Application cum interview form for trade and services

(Restaurants)

1. 2.

Name of the Unit Address of the Unit Phone No. Fax No.

Address of Reg. Office in case of Corporates

4 5 6 7 8

Trade / Services in Year of commencement of business Experience in the line of activity Constitution Details of reconstitution in the past three years

9 Name & Qualificatio n

Age

Details of Proprietor / Partners / Directors PAN Residential Ph no / Address Mobile

Net Worth *

10.

* Opinion report on the banks prescribed format should be prepared. 210

11 Details of existing banking arrangements Name of the Facility Limit Bank / Branch

Outstanding

Banking since

211

12 Name of the unit

Details of Associate / Sister / Identical firms: Name(s) of Banking with Limit Outstandings pro/ partners

13

Details of registration under Shops & Establishments Act / Sales tax Act

14

Position regarding Statutory assessment under IT / Sales tax / Any other Year upto which assessment completed Muncipal / or Local Authorities permissions / Licences for running eating houses Restaurants -

15

16.

Credit facilities required

Fund based Cash Credit (Hyp.) Term loan) Total

Limit required

Non fund based Letter of Credit Bank guarantees Total

Limit required

For term loans Details of assets to be acquired (pl. enclose detailed list if necessary) Description Details of the Cost Time schedule for supplier Need for the proposed expenditure completion

212

Cost Land & Building Equipment i) Interiors Decoration Furniture / Fixtures iii) Air conditioning plant Kitchen equipment

Amount

Means Own funds Other loans (specify source)

Amount

ii)

iv)

a) North Indian Cuisine b) South Indian Other assets Total 17. A B Security Offered Stock (Please give brief details of stocks) of immovable properties Mortgage (Please furnish details of properties offered, in whose names they stand, nature of mortagge, estimated market value, priori charges if any) C D Life Insurance Policies, shares Debentures etc (give details) Guarantee (please indicate Guarantor , his worth etc.) Bank loan Total

213

Place

Signature of Applicants

Date

214

BUSINESS INFORMATION

1.

State whether franchisee

2.

Details principals

of

suppliers/

3.

Seasonality (specific periods)

of peak &

activity off-peak

5.

Terms of Purchase/procurement % of Credit purchases to total purchases Period of credit enjoyed Average level % of sundry Rs. Months

6.

creditors value of remittances to suppliers by DD/TT pa: Estimated Requirement of stocking Average stock holding Rs. Availability of storage Rented/owned

Level facilities/address thereof of competition i. Whether a specialty Restaurant or General one special features like volume sales/catering etc. Any other

ii.

How many similar Restaurants are located in the area, say within 500 mts.

iii. 7.

How many restaurants are running successfully in the neighborhood Marketing arrangements

Major Buyers/consumers with long term arrangement for supply to offices. Catering arrangements.

8.Major competitors & their advantages

215

9.

Competitive advantage of the unit.

10. Terms of sales % % of Credit sales to total sales Period of credit given Average receivables level Rs. % Credit Card sales total sales (present/projected) 11. Performance Parameters Past/projected Past three years Projections 31-3.. 31-3.. 31-3.. Sales/income Net Profit Depreciation Cash Accrual Tangible Worth TOL/TNW Details of Security offered Months

31-3..

Net

Description of property

Name

(i) Immovable property of Value of the Liquid securities Face Value When

Basis Valuation

of

the Owner (ii)

Description

Name of the owner

Present Value

Acquired

Name Guarantor

of

Details of Guarantor where applicable the Age Qualific Net & ation worth

Banking With

I/We declare that the information given in the applicationform are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me/us. I/We shall furnish all other information that may be required by Bank in connection with 216

my application. The i nformation may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards/action for recovery of bank dues including publication of defaulters names in website/submission to RBI. I/We confirm that I/We have no borrowing arrangements for the unit with any bank except those indicated in the application. I/We confirm that I/We are not defaulters of any Bank/any financial Institution. I/We also confirm that there are no overdues/statutory dues owed by me/us and that I/We have/had no insolvency proceedings against me/us nor have I/We ever been adjudicated insolvent. I/We undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me/us.

Signature of Borrower Date : Place

: List of documents to be attached

1. 2.

Partnership deed in original (to be returned) and a copy thereof Memorandum & Articles of Association with certificate of Incorporation original (to be returned) and copies thereof in

3.

Copies of relevant license, documents pertaining to ownership/tenancy/lease agreement in respect of premises where activity will be carried out/service or trade related agreements etc. Latest copy of income-tax return/ sales tax Assessment order etc. Statement of account from the existing banker for last 6 months. Copy of the Title deeds relating to collateral security being offered. Photocopies of PAN card of partners/Directors wherever available Copies of balance sheets for the past three years (audited wherever applicable) Statements of personal Directors/Guarantors assets and liabilities of Proprietor/ Partners/

4. 5. 6. 7. 8. 9.

217

10.

Photographs of Proprietor

/ Partners / Directors/ Guarantors

218

Appraisal form

Name of the Unit / borrower: Segment :

Sector: Priority / non priority Assessment of Working Capital / Term Loan

1.

Performance & Profitability: (Rs. in 000s)

Past 31.03. 31.03 a)Sales / income b) Other Income Years Curren t Yr Next Yr (pro)

Project Ed 31.03 . 31.03 31.03

Credit score wherever applicable 2. Working Capital Required:

Estimated average stock holding at any one time Estimated average receivable outstanding at any one time

: :

Rs. Rs.

---------------------Less Estimated average credit enjoyed on purchases : Rs.

Working capital required (1)

--------------------Rs. ---------------------

219

3.

Sources from which required working capital would be met: Net Working Capital in business (NWC) Bank Finance Recommended Other sources : : : Rs. Rs. Rs. ------------------Rs. =========== OR (A)

(2)

% of Annual Turnover Capital assessed /recommended A or B above whichever is more ie., :

Rs.

(B) Working

Rs.

* Assessed Working capital @ .% PAT Stand by line of credit recommended @ % of above

Rs. : Rs.

Concessions in service charged proposed if any justifications therefor Term loan :

: And

Details of fixed Assets Land Building Others Total

Cost price / estimate (incl. Taxes)

Own funds

Bank finance

Comments on Debt / Equity:

220

Comments on DSCR (in brief):

Analysis based on Risk matrix

Brief comments on limits recommended

In case of renewals comment on conduct of account, credit summations, timely submission of stock / financial statements, return of cheques issued / cheques purchased etc should be incorporated.

Terms and conditions of sanction

a. SECURITY:

Facility

Primary

Collateral WDV MV Valuation dated

Guarantee Name NW As on

Description of collateral security : Deviation from existing security (if any)

b. MARGINS : (FOR EACH FACILITY AS APPLICABLE)

Cash Credit: Existing Stocks Receivables (Cover days) Letter of Credit BG Term Loan 221

Proposed

c) RATE OF INTEREST: Facility d) REPAYMENT SCHEDULE: e) INSURANCE f) SUBMISSION OF STOCK STATEMENTS g) INSPECTION h) PROCESSING FEE i) UPFRONT FEE j) CONCESSIONS IN SERVICE CHARGES Pricing

Appraised by

Assessed by

Sanctioned by

Signature Name Designation Date:

State Bank of India

Branch

222

ANALYSIS OF BALANCE SHEETS

(Rs. in 000s) Liabilities State Bank of India Other Banks Sundry Creditors Expenses Loans Other Liabilities Total Current liabilities (A) Term Loans Others Total Deferred Liabilities (B) Capital & Surplus Total liabilities (A+B+C) Assets Cash Investments Stock Sundry Debtors Others Total Current Assets (D) Net fixed Assets (E) 20 / 20 / 20 / 20 / 20 / 20 /

Miscellaneous assets (F) (G) Intangibles Total miscellaneous assets H = (G+F) 223

Total assets (D+E+H)

Working capital surplus / deficit (current assets current liabilities) Rs.

Tangible Net Worth

(C G)

..

Rs.

Capital Base:

1. 2.

Total liabilities / Tangible Net Worth (Ratio) Sales / Tangible Net worth (Ratio)

. .

Profitability:

3. 4.

Net Profit / Sales (Ratio) Net Profit / Total capital employed (Ratio) (Including current and deferred liabilities) (Ratio) Net Profit / Proprietors capital employed (Ratio) .. ..

5.

Current Position: As on .. 6. 7. 8. Stock about . Months sales Sundry Debtors about .. months sales Sundry Creditor about months purchases

224

OPINION / CREDIT REPORT

Name of the unit

i)

Partners / proprietors capital invested in business:

Name of Partner / proprietor

Capital invested

Loans to the firm, if any

Partners / Proprietors over drawings, if any

Total

Capital of the firm Add : Add: Less: Less Loans from partner / proprietor Reserves and surpluses Partners / proprietors overdraft Debit balance in profit & loss account

Rs. Rs. Rs. Rs. Rs.

Less : Intangibles, if any

Rs.

Tangible Net Worth of the firm / proprietor Rs. ii) Means of partners / proprietor (These details should be furnished separately for each partner if a partner has no assets, indicate accordingly)

225

Name of the partner / proprietor : (a) Details of immovable properties owned.

Name of property

Location

Realisable value in Rs.

Details of prior charges if any

Total (A)

226

(b)

Details of movable properties :

Nature of assets Shares Debentures Insurance policies (surrender value) Other (please specify) Total (B)

Realisable value in RS.

Details of prior charges, if Any

Total Value of assets (A+B)

Rs.

Less Borrwoings agasint total assets mentioned above Other borrwoings / liabilities Rs.

Add:

Investment of the partner in business of the firm

Financed investment of the partner in any other business (specify details) Rs.

Total net means of the partner / proprietor

Rs.

The net means of the partner (Shri / Shrimati. ) can be conservatively estimated at Rs. The aforesaid information has been verified from independent market sources.

(Similar information should be furnished for each partner)

227

iii)

(a) (b)

Tangible Net Worth of the firm Aggregate Net means of the partner Rs.

Rs.

General Remarks :

(Please comment on (a) business ability, (b) credit enjoyed in the market and (c) reputation for honesty, integrity, etc.)

Date ____________

Branch Manager

STANDBY LOAN TO CORPORATES FOR PURCHASE OF VEHICLES

1.

Target Group

Existing corporate borrowers enjoying fund based facilities of at least Rs.1crore in C&I and SSI segments

Eligibility

CRA rating of SB7&SBTL7 and above

Purpose

Exclusively for purchase of new vehicles,(cars, vans, MUVs, minibus) for use by promoters/executives of the unit.

Type of facilities

Term Loan

Quantum of Finance

10% of the fund based limit not exceeding Rs.25lacs

Margin

20% of the cost of the vehicle including tax and insurance

228

Rate of Interest

1% over SBAR irrespective of the CRA Rating

Security: - Primary - Collateral

: Hypothecation of the vehicle by noting charge with the RTO

9 10

Processing fees Repayment

NIL In monthly / quarterly instalments not exceeding 60 months

11

Documentation

i) As per simplified SME Documentation ii) The arrangement letter should indicate that the release of the Stand-by Loan will be at the sole discretion of the Bank. iii) In the case of the loan being extended to partnership firms, all the partners should request for the release (disbursal) of the loan.

12

Special features

The loan should be disbursed as and when requested for, subject to the following conditions:i) the limit is not overdue for renewal ii) the borrowal accounts are regular iii) conduct of the account is satisfactory.

13

Methodology Operation of account

and the

A simple note should be put up to the Branch Manager / Division Manager for release of the loan.

Product Highlights:

229

Very often the corporates which are financed by us for their working capital needs resort to finance from NBFCs or other banks for purchase of vehicles for their CEOs or other senior functionaries. This product is specially designed for extending credit by way of term loan upto Rs.25lacs for SB3 and above rated companies enjoying credit facilities of at least Rs.1crore with us.

Marketing tips:

At the time of renewal of existing working capital limits of eligible units, this product can be offered as an add-on. The repayment period is 60 months The rate of interest is far lower than that charged by car financiers, etc.

AUTOCLEAN

1.

Target Group

.Owners of auto-rickshaws to buy CNG/LPG kits from authorised dealers

2.

Eligibility

Account should be a standard asset if auto is already financed by us. Takeover of accounts from other banks is permitted subject to takeover norms. Borrowers of other banks are NOT eligible. Commercial vehicles are also eligible if necessary permits are eligible. Conversion of petrol operated vehicles to CNG/LPG operated vehicles by fitting CNG/LPG kits Medium Term Loan

3.

Purpose

4.

Type of facilities

5.

Quantum of Finance

Total cost of kits subject to a maximum of Rs25000/-

6. 7. 8.

Margin Rate of Interest Security:

: : :

NIL 1.50% below SBAR

230

- Primary - Collateral

Hypothecation of vehicle OR group guarantee

NIL 9 Processing fees Waived

10

Repayment

24 months 36 months if vehicle is already financed by us

11

Documentation

Hypothecation Agreement As per simplified SME Documentation Irrevocable letter of authority from the borrower Form 29 &30 (Blank Transfer form) Form 34 for creation of charge by RTO using hologram

13

Special features

Obtain the following Driving license Permit Badge copy Fitness Certificate issued by RTO Meter Certificate Work Order from RTO-BTI form RTO endorsement on the RC book after fitting the kit Fitting of the kit should be at an RTO approved centre.

Product Highlights:

This is a product designed to assist in cleaning up the environment, especially in metro and urban centres which have become highly polluted due to auto emissions of all types of vehicles. This product is aimed at owners of auto rickshaws who are obliged to convert their engines to run on CNG / LPG in Delhi and Mumbai by a Supreme Court direction and the others may do so on a voluntary basis. This product is by way of a term loan to meet 100% cost of conversion subject to a maximum of Rs.25,000/- repayable in 24 months. Apart from the 2 metros, where it is mandatory, at other places, it should be ensured that there are adequate refill facilities available for auto rickshaws which are converted to CNG /LPG. Marketing Tips:

231

Our existing borrowers of auto richshaws can be targeted for this product on a longer repayment period of say 36 months .

FAQs

How do we ensure that refill facilities are available in the centre?

The applicant must produce a work order from the RTO before we consider this case. Normally the work order is issued only if refilling and other facilities are available.

CAR LOANS TO SME UNITS

Car Loan to SME Unit (New Vehicles)

13.

Purpose

To provide term loan to the promoter/partner / senior executive of the SME units having borrowing arrangements with the Bank or their family members either in their own name or in the unit's name for purchase of passenger cars, jeeps, multi utility vehicles (MUVs) and sports utility vehicles (SUVs) etc. The loan can be extended to as many promoters / partners , senior executives and even their family members * either on their own name or unit's name based on their individual net worth and repayment capabilities. SME CA holders of the bank or their family member either in their own name or in the units name and other SME 232

14.

Target Group

clients subject to obtaining a NOC from the bank where they might have a loan account. MCG units of the bank will also eligible for the product.

The promoter / partner/ Senior Executive will act as a joint applicant whenever the loan is taken in the name of unit and the joint applicant will also be liable to repay the loan amount. In case the loan is taken in the joint names of the unit and a senior executive, Company or the promoter or the partner will guarantee the loan. Availing of car loan in the promoter's name or firm's name will be left to the choice of the customer.

*Family for this purpose is spouse and children. 15. 4 Nature of Facility Eligibility : : Term loan. Case I - When the loan is availed of in the name of an individual: Income: An individual must have a net annual income of Rs.100,000/- and above for the last year as per income tax return. Case II - When the loan is availed in the name of unit: Since the promoter/partner/ senior executive will be the joint applicant in this case and liable to repay the loan so he/she should meet the following criterion: Income: The joint applicant must have a net annual income of Rs.100,000/- and above for the last year as per income tax return. Definition of Senior Executive: Employees in Top Management, Directors or employees holding the position of responsibility in an Organisation or in other words executives falling one level below the promoter / partner in hierarchy 5 Authorised Branches : All branches catering to SME clients can extend the schemes to SME clients.

Security

Only hypothecation of the vehicle(s) purchased will be taken as a security. This hypothecation charge must be mentioned in the books of the RTO. 233

No additional security including the charge on the existing collateral will be asked from SME clients. 7 Assessment :

Assessment of loan amount will be entirely based upon the personal net worth and repayment capabilities of the individual or the joint applicant when the loan is in unit's name.

Any loan obtained under this facility will not be linked to the existing facilities of the SME units and no additional security will be asked. 8 Loan Amount : The maximum loan amount would be 2.5 times the net annual income (i.e., income as per latest income tax return flied less taxes payable). Regular income from all sources can be 'considered provided the sanctioning authority is satisfied with the proof of income.

The income of spouse can be included provided the spouse guarantees the loan.

For new vehicles, there is no ceiling in loan amount

In any case the EMI / NMI* percentage should not. exceed 50% The A.G.M. Region/Branch or the sanctioning authority, where such sanctioning authority is higher in rank than A.G.M, will have the discretion to grant a higher loan, subject to EMI / NMI percentage not exceeding 60% in deserving cases or owing to strategic reasons. *(EMI - Equated Monthly Installment) (NMI - Net Monthly Income) _ 9 Margin : 15%

The sanctioning authority will have discretion to reduce the margin by 5%. A further reduction of 5% can be given by an authority of the rank of AGM based on the factors like relationship, business expected, competition, etc. In any 234

case the total reduction in margin should not be more than 10%.

10

Rate of Interest *

FLOATING RATES: 10% p.a. (fixed) interest rate for all new loan sanctioned upto March 2010 and 10% p.a. fixed for 2nd and 3rd year with reset clause thereafter.

11

Penal Interest

Since the applicants under this facility will be our SME borrowers it should be possible to monitor closely and prevent the accounts from becoming irregular. However should some accounts become irregular due care should be taken to make then regular within 60 days. .

In case the account remains irregular beyond a period of 30 days a penal rate of 1 % p.m. over and above the applicable rate can be charged.

12 13

Processing Fee Repayment

: :

nil 7. The loan should be repaid in suitable monthly/quarterly installments acceptable to the customer in such a manner that the loan is liquidated within a period of 7 years. The customer will have option for payment in shorter duration.

b) The Equated Installment will be determined on the basis of the current rate of interest.

c) Post dated cheques should be obtained from the borrower.

Since we are dealing with the promoter / partner of the SME units in their individual capacity and not as employees of the unit check off facility may not be applicable under this facility. Suitable standing instructions on their accounts to recover installments and interest may be taken.

235

14 15

Security Documents Insurance

: :

As applicable to P Segment Car Loan The vehicle purchased is to be kept comprehensively insured in the name of the borrower for the market value or at least 10% above the loan amount outstanding, whichever is higher, and the Banks interest as a 236uthorized236 should be noted in the certificate of insurance and insurance policy. A copy of this is to be retained with the loan documents. Insurance register is to be maintained

16

Mode of Disbursement

Amount should be remitted direct to the supplier/dealer by means of a crossed Account Payee demand draft / bankers cheque which should be forwarded under cover of a letter as per Annexure car IV.

The beneficiarys Bank name and if possible, Bank account number should be ascertained from the beneficiary and mentioned in the draft/bankers cheque. No charges should be levied for issuance of bankers cheque/demand draft.

17

Prepayment Penalty

Prepayment fee of 2% of the amount of the loan prepaid will be levied if the loan is taken over by another bank / FI Or the loan is repaid before expiry of half the agreed repayment period Or partial repayment is made in the first year No pre payment to be levied if the loan is foreclosed in order to avail a fresh car loan.

18

Inspection

7. For Standard Asset .accounts periodical. Inspections are waived after the initial inspection. However, if there is a default of 2 monthly installments, inspection would be required. In case of NPA accounts inspections should be made twice a year. b) Inspection register is to be maintained properly.

19

Discretionary Power

To be exercised as per the Delegation of Powers advised by the LHO

20

Papers to be

The following papers to be submitted along with loan

236

submitted

application 2 passport size photographs of borrower / guarantor(s). A copy of passport /voters 1D card / PAN card Proof of residence .Copy of Income Tax Return for last two financial years, duly acknowledged by ITO.

21

Applicants restricted under this facility

This facility should not be extended in cases where: The SME units are weak or have turned NP As or likely to become NP As. The relations between branches & promoter(s) is soured. Wherever it is proposed to initiate legal action against the unit / promoters

22

Authority to release Car Loan

SMGS IV are authorized to release SME Car Loan for units which have credit limits classified as standard assets (not below SB-7 or SBTL-7) and where the car loan amount does not exceed Rs.25 lacs or 10% of the existing fund based exposure to the unit (whichever is less) and seek post-facto approval of the appropriate authority. SMGS IV will include Chief Managers of SMECC /RASMECC/RCPCs.

The accounts handled by RMMEs may be sanctioned by Chief Manager/AGM of the Branch or AGM Region to whom the RMME reports subject to the above.

In case of those Branches not attached to SMECC /RASMECC/RCPCs Chief Manager of the Branch can sanction the loan.

Car Loan to SME Unit (Used Vehicles)

237

Purpose

To provide term loan to the promoter/partner of the SME unit or their family members either in their. Own name or in the units name for purchase of passenger cars, jeeps, Multi Utility Vehicles (MUVs) and SUVs not more than five years old.

Loan Amount

Subject to a maximum of Rs. 15 lakhs.

(All other details under this head are same as that of car loan to SME Units)

3.

Valuation

Certificate of fitness/valuation from a reputed garage would be required which should be retained with the loan documents. The garage should be 238uthorized by the Liaison Officer in the LHO/ZO in big cities. No valuation certificate is required if the car is sold under the Maruti True Value scheme or Automartindia.

4.

Take over of loans

Branches should ensure that the fitness and valuation is appropriate to the past ownership pattern. Care should be taken to avoid models, which have a low second/third hand demand like Fiat, Uno, Daewoo, Matiz, etc. i) Takeover of car loans may be considered selectively where: a. The vehicle is not more than 2 years old b. It is a single ownership vehicle c. No insurance claim has been availed and. d. The account of the borrower with the other bank is a Standard Asset i.e. all repayments have been made as per terms of sanction of the original financier.

ii) The loan should be repaid within 7 years from the date of the original purchase of the vehicle

iii) Reimbursement of costs of unencumbered vehicles can also be given under the above takeover norms and 238

other terms of financing old vehicles up to 2 years of age.

5.

Repayment

For old vehicles recovery should be such that the loan gets repaid within 7 years from the date of original sale. Maximum repayment period to be fixed as per age of the vehicle. Repayment schedule will be fixed while ensuring that the loan gets repaid within 7 years of life of the vehicle e.g., a five year old vehicle will be financed with a repayment period of 2 years only.

(All other details under this head are same as that of car loan for new vehicles)

6.

Rate of Interest

FLOATING RATES only All Centres: a. Upto 3 years: b: Above 3 yrs and upto 7 yrs: 2% above SBAR 2.25% above SBAR

7.

Special Remarks

All the other features for car loan for used vehicles are same as the car loan for new vehicles. OD facility is NOT available for SME Car Loan ( both new and used vehicles)

* SME Car Loan Revised Interest Rate The rates are valid for all sanctions upto 31st March 2011. 2. The loans would cover only new cars. 3. The period of loan would be maximum of five years

239

SME units/ MCG units with rating SB1 SB5

9.00% in the first year, 9.25% for 2nd year and 9.50% for 3rd year. Thereafter, rates would be subject to reset to card rates, presently, 3.75% above Base Rate for 4th and 5th year. 9.50% in the 1st year and 9.75% for 2nd and 10% for3rd year. Thereafter, rates would be subject to reset to card rates, presently, 3.75% above Base Rate for 4th and 5th year. 10% in the 1st, 2nd and 3rd year. Thereafter, rates would be subject to reset to card rates, presently, 3.75% above Base Rate for 4th and 5th year. 10% in the 1st, 2nd and 3rd year. Thereafter, rates would be subject to reset to card rates, presently, 3.75% above Base Rate for 4th and 5th year.

SME units with rating SB6 SB9/ Units banking with other Banks Unrated SME borrower (below Rs.25 lacs) In case of CA holders

PARYATAN PLUS

13. Target Group

All segments of tourism namely : Hospitality Industry Transportation Travel agents Tour operators Adventure tourism Religious tourism

14. Eligibility

Individuals, partnerships, corporates, trusts

15. Purpose

Construction / renovation / modernisation / expansion to Hotels / Yatri Nivas / Dharamshalas, etc. Construction of office premises/purchase of office furniture and computers etc., by travel agents/tour operators Purchase of luxury buses/ coaches ,cars, vans etc., at tourist sites Purchase of house boats/ luxury boats Setting up of restaurants/coffee houses/ icecream parlours etc. Amusement parks / Ropeways Health clubs / Spas 240

16. Type of facilities

CC(Hyp) , TL , LCs, BGs

17. Quantum of Finance

Minimum Rs.2lacs

18. Margin

20% 40% for purchase of old vehicles of less than 5 years

19. Rate of Interest

As per C&I / SBF rates as the case maybe

20. Security: - Primary - Collateral 21. Processing fees

Hypothecation of assets financed by the Bank Tangible Collateral of immovable property or TDRs,NSCs, KVPs,, etc for at least 50% of the loan amount

As applicable to C&I / SBF units

22. Repayment

TL 3 to 7 years including start up period not exceeding 18 months CC Repayable on demand

23. Documentation 24. Special features

: :

As per simplified SME Documentation Maintenance of Current Account to route all receipts is mandatory DSCR - minimum 1.5 in case of vehicles Appropriate licenses to be obtained Only skilled / trained persons eligible Audited financials are desirable Take over of loans permissible subject to take - over norms For tourism related activities, WC limit over Rs.20lacs or Advance for purchase of more than 10 vehicles under this scheme must be classified under C&I segment and should be treated as such for all purposes. Luxury coaches upto 10vehicles can be financed under Transport Operators Scheme 241

Product Highlights:

A comprehensive product aimed at the Tourism industry for providing finance for various activities such as hospitality industry, transportation and tour operators have been brought under the ambit of "Paryatan Plus". No cap is stipulated for this product. Credit facility can be granted by way of TL / CC / LCs / BGs for the purpose of construction of hotels / rest houses / Yatri Niwas, Luxury buses / Boats / Amusement Parks, Health Spas, Travel agents etc.

Marketing Tips:

Tour operators, travel agencies are ready market for this business. Hotels, restaurant owners at tourist sites can be targeted for this product. Established and reputed travel agents such as Thomas Cook, Sita travels, SOTC etc., can be contacted. Takeover of existing loans from Banks / FIs is a ready source of business. TLs extended by Tourism Development Corporation at high rates of interest can be taken over subject to take over norms being fulfilled.

FAQs

How can we decide whether the term loan for purchase of vehicles by a large travel agency should be considered under Transport Plus or Paryatan plus ? Transport plus has an upper ceiling of Rs.7.50 crs.but this product has no ceiling.

Enclosure to Circular No. CIRCO/ADV/221/2004-05 dated 14.12.2004

State Bank of India Operators .. Branch

Small

Business

Transport

Interview-cum-Appraisal Form

242

APPLICATION FOR TERM LOAN / WORKING CAPITAL ADVANCES 1. 1.1 1.2. 1.3. 1.4. Personal Data Name of the Applicant Business Address Constitution Experience Name(s) of proprietor / partners / Office-bearers of co-operative society experience : : : : Age : Previous

1.5.

If already owning vehicles, details (like type, year of manufacture, cost price, present estimated value, income therefrom, if a loan has been taken against them, details) : Whether the vehicle will be driven by the applicant) Staff employed

1.6. 1.7. 1.8.

: :

In the case of owner-drivers, a) Number of the dependents of the family : b) Minimum sustenance amount required for the family : c) Present monthly income. d) Whether belonging to scheduled caste / tribe: e) If owning land, its size : Date on the vehicle proposed to be purchased : Type, make and year of manufacture Fuel used Dealer's name and address : : :

2. 2.1. 2.2. 2.3. 2.4.

Cost: : (Proforma invoice to be enclosed. In the case of secondhand vehicles, valuation certificates from two reputed dealers, workshops to be enclosed) i) ii) iii) Chassis Body Building Others ( ) : : : Rs. Rs. Rs. ------------------------------

243

Total Applicant's contribution ( % ) Loan required

: : :

Rs. -----------------------------Rs. -----------------------------Rs. -----------------------------

2.5.

If a working capital loan is required, details relating to purpose (enclosing estimates / invoices, where applicable) amount involved, etc.) : Amount of working capital required Operational viability Carrying capacity of the vehicles (persons / load) Route on which or area where the vehicle will operate : : Rs.

2.6. 3. 3.1. 3.2.

3.3.

Position relating to the obtaining of the necessary licence / permit : Anticipated monthly earnings :

3.4. 3.5.

Factors which assure the applicant of achieving the above earnings and of a successful business in his area of operation :

3.6. 4. 4.1. 4.2.

Particulars of Sales Tax & Income Tax assessments: Repayment : Rs. Rs. Rs. -------------------------Rs. (A) -------------------------Rs. (B) --------------------------

Start-up period required, with reasons : Monthly repayment towards existing Bank Loan : Monthly repayment towards proposed Bank Loan: Monthly repayment towards other borrowings (To be specified) : Total :

Anticipated net cash accruals as per enclosure : Debt service ratio : B / A : ----------244

5. 6.

Security Any other remarks:

Date Place

: :

(Signature of borrower).

Name of the Bank official who interviewed the applicant 7. Remarks of the Appraising official.

8.

Loan recommended, with stipulations:

Date
Recommending Officer 9. Section: Date Authority. Sanctioning Recommending Officer Recommending Officer

245

TRANSPORT OPERATORS OPERATIONAL VIABILITY: 1. Income per month: i) ii) iii) iv) v) vi) 2. Number of days in a month the vehicle will be on the road Number of kilometers it will run per day Fare / Rate per kilometer Average income per month Any other (outside) income Total income (iv) + (v) : : : : : :

Rs. Rs. Rs. Rs.

(A) (B)

Expenses per month: Fuel per month where X Z Y N i) ii) iii) iv) v) vi) vii) viii) ix) x) = = = = Cost of fuel per litre. Kilometers run per day Cost of fuel per litre No.of kilometers the vehicle will run Per litre. : : : : : : : : : : Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. -------------------Rs. (C) -------------------: : : : : Rs. Rs. Rs. Rs. Rs. --------------------= XYZ N

Motor and other municipal taxes Insurance premium Garage rear Depreciation Interest on borrowings Maintenance expenses Cost of oil, spares, etc. Staff salary Drawings of the operator Others Total expenses

3.

Surplus: B - C Income tax,if any Net surplus Depreciation added back Net cash accruals

4.

TRANSPORT PLUS

246

1.

Target Group

Surface transport operators owning more than 10 trucks /tankers / tippers / luxury buses etc including the proposed generally complying with eligibility criteria detailed below

2.

Eligibility

Transport operators holding valid national / State route permits The promoters/CEO should be IT assesses. The promoter/ CEO should have experience of 3 years or more in the field, and should have an annual income of Rs.3lacs as per IT assessment in the previous year. Dealings with their bankers should have been satisfactory. Should be reputed and IBA approved in the case of trucks. Should record a rising trend in income and profits in the last two years with a profit of at least Rs.3 lacs in the past two years. Should own more than 10 well maintained and road worthy vehicles Should have had dealings with banks /FIs for at least 2 years. Should have a receivable level of within 4 months Value of orders on hand should be at least 30% of projected annual turnover. Average DSCR (gross) :Minimum 2* Current ratio minimum 1.33* TOL /TNW maximum 2.75* (*These norms are relaxable by the sanctioning authority upto the levels as per loan policy guidelines if 100% tie up arrangements are in place.) To finance purchase of new transport vehicles and WC finance against receivables for cost on road ie all costs such as, invoice price of the chassis, cost of body building, road tax, insurance, etc..

3.

Purpose

4.

Type of facilities

TL and Cash Credit

5.

Quantum of Finance

Corporates TL& CC - Rs.10 lacs to Rs.10crs

Non Corporate

Rs.10lacs to Rs.7.50crs

247

6. 7.

Margin Rate of Interest

: :

TL & CC

20%

For TL : 0.25% above SBAR For CC: 1.00% above SBAR

8.

Security: - Primary - Collateral

: Hypothecation of vehicles financed, spares and receivables

Other unencumbered vehicles / immovable property for a value of not less than 25% of loan amount

9.

Processing fees

1%

10. Repayment

TL Maximum of 5 years . EMIs to start from after 3 months. PDCs to be obtained for the entire period of repayment CC - Repayable on demand and renewable annually

11. Documentation

As per simplified SME Documentation

12. Special features

Prepayment charges of 1% p.a. for the amount prepaid and for the residual period Inspection once year

Product Highlights:

So far, NBFCs have been the major source of finance for fleet owners especially of surface transport. This product has been designed to take care of the credit needs of
248

the transport vehicle owners of 10 or more vehicles used for transportation of goods and passengers and holding valid permits for plying the vehicles either within the state or inter- state or national permit. The product comprises of a TL portion for financing of 80% of the cost of the vehicle and a cash credit portion to take care of the working capital needs of the operation to the extent of 80% of the receivables not more than 4months old.

Marketing Tips:

Exporters of perishables such as seafood, vegetables and milk who use refrigerated vans for moving their merchandise from the production location to the processing plants / ports can also provide business for the Bank under this product.

249

ANNEXURE

STATE BANK OF INDIA

BRANCH:

FINANCING FLEET OPERATORS - LOAN APPRAISAL NOTE


NAME OF THE FIRM/COMPANY:

NAME OF THE CHIEF PROMOTER/: CHIEF EXECUTIVE

CUSTOMER/ A/C NO:

1.a)

Personal details:

SR. NO. 1.

PARA METERS

CRITERIA

ELIGIBILITY (YES/NO)

Experience in transport business

More than 3 years

2.

Owning a house

In own/spouse name or ancestral (may be mortgaged) For income of 2 lacs and above

3.

Income Tax Return filed/ assessed for last year Dealing with Banks

4.

Satisfactory record

b)

Business details:

250

1.

Constitution

Pvt./Public Ltd. Company/ Partnership

2.

IBA approval and/or Membership of For trucks only local transporters association. Continuous profit Income shows a rising trend Last 2 years Last 2 years

3. 4. 5.

No of vehicles owned (including the More than 10 well-maintained proposed) vehicles (age not more than 12 years) Maintenance of existing vehicles Evidenced by routine frequency of servicing/ accident record Satisfactory record Tie up with companies Up to 3 months of income

6.

7. 8. 9. 10.

Dealing with Banks/FIs/ NBFCs Assured cash flow Quality of receivables

Value of orders/contracts on hand to Over 30% Estimated Income (%) Repayment period proposed (TL) Liquidity TOL/TNW Average gross DSCR (TL) Promoters project (TL) Debt/equity contribution to Up to 5 years Minimum 1.33 (1.33) * Maximum 2.75 (3.00) * Minimum 2.00 (1.75) the Minimum 20%

11. 12. 13. 14. 15.

16.

Maximum 2: 1

* May be diluted upto the indicative level as per the loan policy guidelines, as shown in bracket, for units having 100 % tie-up arrangements.

c)

Collateral Security:

251

1.

Value of collateral security (all 25% and above where 100% existing unencumbered vehicles and tie-up arrangements exist, others, if any) /loan amount (%) otherwise at least 50%.

The proposal will be considered acceptable only if the answers are yes for all the above 21 parameters under the eligibility column of sl. no. 1(a), (b) and (c). (Rs. In crores)

2.

Performance & Financial indicators:


As on 31.03 Actuals Actuals (Earlier Estim.) Estim (Cur. Year) Projections (Next Year)

PUC TOL TNW TOL/TNW Cur. Ratio

3.

Term Loan : Commercial viability:

Sales/Income Net Profit Cash Accruals Interest TOTAL TL repayments Interest TOTAL Gross DSCR Average Gross DSCR

252

Net DSCR Comments on DSCR (in brief)

4.

Assessment of Cash Credit limit:

Receivable levels: (Months/Days)


Receivable/Payments Estimated Projected

Actuals
Receivables S. Creditors

Assessed Bank Finance:

Assessed Bank Finance


Year TCA OCL WC Gap NWC BANK FINANCE (BF)

Estimated

Actuals

Projected

Brief comments on the assessment of the cash credit limit: (Additional information may be added to cater to a particular proposal) 5. Recommendations for the proposed facilities:

253

6.

Submitted for sanction.

Signature :

Designation :

Appraised by

Assessed by

State Bank of India, ..Branch, Date:

ANNEXURE-3

STATE BANK OF INDIA

BRANCH:

FINANCING FLEET OPERATORS LOAN APPLICATION FORM

----------------------------------------------------------------------------------------------------------PLEASE FILL UP THIS FORM ONLY IF THE ANSWERS TO ALL THE FOLOWING QUESTIONS ARE 'YES' -----------------------------------------------------------------------------------------------------------

254

1.

Whether the promoters have satisfactory record of dealing with Banks and have never defaulted to any Bank/FI/s? Whether the fleet possesses more than 10 well-maintained vehicles, including the proposed vehicle/s? Whether the registered/administrative office is situated at metro/urban/semi urban centre? Whether the unit is earning profit?

2.

3. 4.

----------------------------------------------------------------------------------------------------------------PLEASE USE SEPARATE SHEET, WHEREVER SPACE IS NOT SUFFICIENT -----------------------------------------------------------------------------------------------------------------

A.

PERSONAL DETAILS OF THE CHIEF PROMOTER/CHIEF EXECUTIVE


a) Name: b) Son/wife of: c) Date of Birth: Residential address:
Tel.Nos: Fax No: e-mail:

1.

2.

3.

Your house is: Owned Owned (mortgaged) Rented

4.

Academic Qualification:
Is it related to your line of trade?

5.

Experience in Transport business

255

(no. of years and brief details): 6. Your Income Tax Permanent A/c No:

7.

Details of Bank account: Bank and branch: A/c No: Opened on:

8.

Details of assets:

Land/Building: (location, value etc.)

ii) Vehicles owned: (Regn.No, make, model, present value)

iii) Life Insurance Policy (Policy no, sum assured, amount paid up, etc.)

iv) Bank deposits (Bank branch, A/c no., present outstandings)

Jewellery and household goods: (description, value) 256

vi) Others (description, value)

9.

Details of liabilities:
i) Housing loan details: Address of the house/flat: Loan amount: Repayment terms: Present oustandings: Loan availed on: Bank & Branch:

ii) Car loan details: Regn.No: Make & Model: Loan amount: Repayment terms: Present oustandings: Loan availed on: Bank & Branch:

iii) Other loan details: (including loans from friends & relatives)

B.

GENERAL 257

1.

Name of the company/firm:

2.

Address:

Regd. office:

Telephone No:

Admn. office:

Telephone No:

Branch office/s:

Telephone No:

3.

Constitution:

4.

Loan applied for:

i) Term Loan: Rs. ii) Cash Credit: Rs.


-----------------TOTAL Rs.

5.

Purpose of the loan: (Purchase of vehicles, working capital

258

requirement, etc.)

6.

Mode of repayment:

C.

BUSINESS DETAILS

1.
2.

Year of commencement of business:


a) What is the level of competition for the business?

How do you plan to meet the competition?

What are the marketing arrangements?

Please mention about value and details of tie up arrangements/orders/contracts with clients:

3.

IBA approval obtained? If yes, details:

4.

i) Details of Bank Account:

Bank/Branch:

A/c No:

Since:

259

ii) Can all sale proceeds be routed through your account with us? If not, give reasons:

5.

What is the quality of your receivables?

How many months income do they represent?

Can you give an ageing of your receivables? (as on last 31st March)

AGE Less than 1 month old 1 to Less than 2 months old 2 to 3 months old More than 3 months old Total

AMOUNT

PERCENTAGE OF TOTAL

100%

What are the means of finance?

MEANS

AMOUNT (Rs)

GIVE DETAILS (BANK SHOULD BE SATISFIED ABOUT YOUR ABILITY TO PROVIDE THE MARGIN)

From own sources

260

Bank loan Friends and relatives Others Total 7. What is the repayment period you are looking for the term loan?

8.
9. term

What will be the annual cash accruals?


What will be your liability towards payment of installments and interest on loan in a year?

10.

Whether the cash accruals will be sufficient to take care of the repayment

liability?
11. Brief background of the firm/company:

12.

Details of Associate concerns with their borrowing arrangements:

13.

Details of major shareholders:

14.

Names of Key Managerial & Technical Staff with their qualification/experience:

15.

Are your business operations computerised?

16.

Arrangements for periodic maintenance of vehicles: (Details of routine frequency of servicing, maintenance procedure, accident record)

17.

Anything else you would like to tell about your business.

261

18.

What is the collateral you would be able to offer? Give details.

A. UNENCUMBERED VEHICLES:

REGN. NO. & DESCRIPTION

PRESENT VALUE (Rs)

BASIS

Total

B. OTHERS, IF ANY: DESCRIPTION PRESENT VALUE (Rs) BASIS

Total GRAND TOTAL (A + B):

19.

Please tell us about your future plans:

What is the level of income/sales you are projecting for next 5 years? Briefly describe the basis.

What is the level of receivables you are expecting for next 5 years in month's income/sales?

terms of

262

20.

a) Whether the vehicles come to the headquarters every month?

b) Can the vehicles be available to the Bank for inspection purpose every month? If yes, how?

I/we certify that all information furnished by me/us is true, correct and complete. I/we have no borrowing arrangement for the company/firm with any bank except as indicated in the application form. There are no overdues/statutory dues owned by me/us or the firm/company. No legal action has been taken against me/us/firm/company. I/we shall furnish all other information that may be required by Bank in connection with my/our application. This information may also be exchanged by you with any other agency, you may deem fit. You, your representatives or any other agencies as authorized by you, may at any time inspect/verify my/our assets, books of account, etc. in our office/business premises as mentioned above. You may take appropriate safeguards/action for recovery of bank's dues including publication of defaulters' name in web site/submission to RBI. I/We further agree that my/our loan shall be governed by the rules of State Bank of India as may be in force from time to time.

For and on behalf of the company/firm

Place:___________

Date: ___________

Signature of Chief Promoter/:_____________ Chief Executive with seal

ENCLOSURES:

1.

Details of Existing Vehicles

263

Regn.No.:

Model/Year:

Make:

Name of financer:

Amount:

Present outstandings

2.

Audited Balance Sheet for last 2 years

3.

Income Tax Assessment/Acknowledged : copies of last 3 years (Personal & Business)

4.

Bank Statement of last 3 years (Business)

5.

Quotations

6,

Copies of Partnership Deed/Certificate of Incorporation and Commencement of Business/ Memorandum and Articles of Association:

7.

Copies of route permits, driving licenses of drivers:

264

8.

Photographs of promoters/guarantors, with their signatures:

9.

Credit Information Sheet of the Promoters/Company/ Firm/Guarantors:

10.

Projections for 5 years:

11.

Documents of tie-up arrangement:

12.

Details of servicing/accident record:

13.

Any other papers necessary for loan approval

Transport plus circular

ANNEXURE-4
POST DATED CHEQUES (PDCs) GUIDELINES

i)

Number of cheques to be obtained: 60 PDCs or number of cheques covering the full repayment period, whichever is less should be obtained. Cheques should be scrutinized to ensure that these are properly filled in. The 'Crossing Seal' would be required to be put on the face of the cheque before keeping them in custody.

ii)

Date of PDCs: The cheques should preferably be dated prior to the 7th of every month.

265

iii)

Custody: PDCs should not be retained alongwith the security documents to avoid unnecessary handling of documents. These should be retained by the Asst./Deputy Manager (Advances) in joint custody with Manager of the Division or Accountant or Cash Officer and placed in a fireproof safe/locker.

iv)

Handling of cheques returned unpaid: Should any cheque be returned unpaid for want of sufficient funds, the borrower should be immediately contacted. The cheque should be represented within a period of three days of its having been returned unpaid on a written request of the borrower. In the event of the borrower failing to deposit the amount of the cheque, the undernoted procedure for initiating legal action under Section 138 of the Negotiable Instruments Act, 1881, should be initiated:

Steps to be taken when a cheque is dishonoured on account of (a) insufficient fund (b) closing the account, (c) stop payment of the cheque (on account of insufficient fund).

Step 1

When a cheque is dishonoured the branch has to give a notice in writing to the drawer within 15 days. Enter in a separate register for this purpose and monitor.

Step 2

If drawer fails to make the payment of the said amount of money to the Bank within 15 days of the receipt of the notice mentioned in Step-1, proceed to Step-3.

266

Step 3 File a complaint before the Metropolitan Magistrate or First Class Magistrate, within one month from the date of cause of action.

Example: Cause of action arose on 01.01.2003, under Step-2, (that is failure to pay within time mentioned there) file the complaint on or before 31.01.2003.

Step 4

During the pendency of the complaint if the drawer desires to compound the offence, branch can withdraw the complaint on receipt of the amount of the cheque, interest, legal cost and other expenses.

It may, however, be noted that the initiation of legal action is a measure of last resort and all efforts should be made to contact the borrower to regularize the position. However the one month time limit shall not be allowed to be exceeded under any circumstances, (except under instructions from the Controlling Office).s

PETRO CREDIT
1. Target Group : Retail Outlets (RO) of petroleum products of Reliance Industries Limited(RIL).

Eligibility

RIL plans to set up 5500 retail outlets for their petroleum products on Dealer owned & Dealer operated(DODO) basis in addition to Company-owned &dealer operated(CODO)outlets . The Bank has entered into an MOU with RIL for a tie up arrangement for financing their retail outlets Corporate and non corporates having dealership appointment letter from RIL are eligible

267

Purpose

To purchase land / to set up infrastructure required / to set up shops/eateries /ATM / internet kiosks etc.

Type of facilities

: Term Loan / Cash Credit

Quantum of Finance

TL Maximum Rs.100 lacs CC As per eligibility For DODO model 75% of cost of stocks of petroleum or 4 days cost of sales of petroleum, whichever is lower. For CODO model 75% of cost of stocks of petroleum For stocks of other items such as tyres, spares, and other related products/services as specified by Reliance, the credit requirements need to be assessed accordingly.

Margin

15 to 25 % for TL 25% for WC

Rate of Interest

For TL of 84 months and cash credit Floating rate 3% below SBAR with monthly rests or . Fixed Rate - 9.30% with monthly rests for TL of 60 months and rate to be reset every 2 yrs

Security: - Primary

: i) ii) Mortgage of land Hypothecation of all assets created out of Bank finance For dealers with a satisfactory track record of 3 years in any business

- Collateral

i)

268

9 10

Processing fees Repayment

0.50% of TL and Rs.250/- per lac for WC For term loan

For fixed rate of interest -:maximum of 54 EMIs starting after 6 months from the date of first disbursement.

For floating rate of interest :- Maximum 78 EMIs starting after 6 months from the date of first disbursement

For Cash Credit Repayable on demand and renewable every year

11

Documentation

Revised C&I documents An undertaking from the borrower that he will not obtain any further loans for petro-retailing business without prior written permission from the Bank A tripartite agreement between RIL, their dealer and the Bank for RIL to provide support to the Bank in the event of default by the dealer to the Bank Pre-payment charge: - As per extant instructions. No charge if the fixed rate TL is paid in full in case of upward resetting of interest rare Insurance of assets acquired out of Bank finance for full market value to cover all risks has to be obtained

12

Special features

Product highlights:

RIL standardized project reports for different types of Retail Outlets (RO) depending on location. The capacity of the different ROs will be 2 and 3 dispensers only. The maximum projected sales for an RO with 2 dispenser will be 50kl of motor spirit and 300kl of High Speed Diesel per month and 50kl MS and 500kl of HSD per month for an RO with 3 dispensers. each dispenser will have a storage capacity of 20kl of MS and 40kl of HSD.

269

The project cost of an RO will be around Rs.60 to 70 lacs excluding cost of land and working capital requirement of Rs.10 lacs. Security deposit is payable by the RO to RIL

Marketing tips:

RIL is in the process of selecting dealers for retail outlets for selling their petro products. RIL plans to open 5500 retail outlets in the coming 3 years of which 2000 will be set this year. A list of such selected dealers will be provided by RIL and these leads will have to be pursued for booking business under this product.

STATE BANK OF INDIA


_____________________ BRANCH APPLICATION CUM INTERVIEW FORM FOR FINANCING OF PETROLEUM RETAIL OUTLETS UNDER PETRO CREDIT

Name of the unit Address of the unit Phone No Fax No Email/Website Address of Regd. Office in case of Corporates Premises Owned/Rented Premises owned

270

Address for correspondence Phone No Fax No Email/Website Other Services being provided Year of Commencement of Business Experience in the line of activity Constitution Details of reconstitution in the past three years Premises Owned/Rented

Details of Proprietor/Partners/Directors Name & Qualifications Age PAN Residential Address Phno/Mobile NetWorth*

* Opinion report on the banks prescribed format should be prepared

Details of existing banking arrangements: Name of the Bank/Branch Facility Limit Outstanding Banking since

271

Details of Associate/ Sister/Identical firms: Name of the unit Name of the Prop/partners Banking with Limit Outstandings

Details of registration under Shops & Establishment Act / Sales Tax Act/ Any other Act Position regarding Statutory assessment under IT/Sales Tax/Any other Year upto which assessment completed

Credit Facilities required Fund based Cash credit (incl of bill/chq purchases) Term loan Total Limit required Non fund based Letters of Credit, if any Limit required

Bank Guarantees if any Total

For Term loans Details of assets to be acquired (pl enclose detail lists if necessary Description Details of the supplier Cost Time schedule for completion

Need for proposed Expenditure

272

Cost Land & Buidling Equipment (proforma invoice to be enclosed) Other assets Total

Amount

Means Own funds Other loans (specify source)

Amount

Bank loan Total

Any other information(including specific reasons for Letter of Credit /Bank Guarantee)

273

BUSINESS INFORMATION Nature of activity (strike out whichever is not applicable) (State also whether C & F /Franchisee/dealership / distributorship/ stockist/profession/line of service etc) Trader(wholesale/retail) Business Enterprise / Prof & Self Employed / Transport Operator

In case of C & F / distributorship etc arrangement is valid upto Requirement of Statutory licenses / approvals Give full details Details of suppliers / principals Seasonality of activity (specify peak & offpeak periods)

Terms of Purchase/Procurement Domestic % of Credit purchases to total purchases Period of credit enjoyed Average level of Sundry Creditors Purchases under LC included above Rs. Rs. % Months Rs. Rs. Imports % Months

Estimated value of remittances to suppliers by DD/TT p.a.

Requirement of stocking
Average stock holding Availability of Storage facilities /address thereof Rs. Rented/owned

Marketing arrangements
Availability of tie-up arrangements Major buyers/consumers Level of competition

274

Major competitors Competitive advantage of the unit

Terms of Sales
% of Credit Sales to total sales Domestic % Period of credit given Average Receivables level Months Rs.

275

Performance Parameters Past/projected Past three years 31.3.. 31.3 31.3 Sales/Income Net Profit Depreciation Cash Accrual Tangible Net Worth TOL/TNW Projections 31.3 31.3

For term loans, please enclose projected profitability statements covering the period of repayment Details of Security offered Primary Collateral (i) Immovable Property Description of Property Name of the Owner Value of the Property Basis of valuation

(ii) Liquid Securities Description Name of the Owner Face Value When Acquired Present value

Details of the Guarantor where applicable Name of the Guarantor & Address Age Qualification Networth Banking with

276

I/We declare that the information given in the application from are true, correct and complete and that they shall from the basis of any kind of facility State Bank of India may decide to extend to me/us. I/we shall furnish all other information that may be required by the Bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards / action for recovery of bank dues including publication of defaulters names in website/submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I / We confirm that I / We are net defaulter of any bank / any financial institution I/We confirm that there are no over dues /statutory dues owed by me/us and I/WE have/ had no insolvency proceedings against me/us nor have I/we ever been adjudicated insolvent. I/We undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me/us.

Signature of Borrower

Date: Place: Name of the Interviewing Official

List of documents to be attached 1. Partnership deed in original(to be returned) and a copy thereof 2. Memorandum & Articles of Association with certificate of Incorporation in original(to be returned) and copies thereof

277

3. Copies of the relevant licence, documents pertaining to ownership/tenancy/lease agreement in respect of premises where activity will be carried out / service or trade related agreements etc.. 4. Latest copy of Income tax returns/Sales tax assessment order etc. 5. Statement of account from the existing banker for last 6 months 6. Copy of Title deeds relating to collateral security being offered 7. Photocopies of PAN card of partners/Directors wherever available 8. Copies of balance sheets for the past three years (audited wherever applicable) 9. Statement of personal assets and liabilities of Proprietor/Partners/Directors/Guarantors 10. Photographs of Proprietor/Partners/Directors/Guarantors

278

APPRAISAL

Name of unit/borrower:

Segment: SBF/C&I Sector: Priority/nonpriority

Assessment of Working Capital/Term Loan 1. Performance & Profitability: (Rs. In 000s) Past 31.0 3 31.03 Years Projected Current year(est) 31.03.. a) Sales/Income b) Other Income c) Total Income (a+b) % increase in c d) Expenses e) Taxes f) Net profit (c-(d+e)) g) Depreciation h) Cash Accruals (f+g) i) TL repayment j) TOL/TNW k) NWC l) Current Ratio m) DSCR (Gross) Next year 31.03 31.03 31.03 31.0 3

279

Credit score wherever applicable:

2. Working Capital Required Estimated average stock holding at any one time Estimated Average receivable outstanding at any one time

Rs

Less Estimated average credit enjoyed on purchases Working Capital Required (1) 3. Sources from which required Working Capital would be met: Net Working Capital in Business (NWC) Bank Finance Recommended Other sources (2) (A) OR .. % of Annual Turnover (B) Working capital Assessed/recommended A or B above whichever is more i.e. * Assessed Working Capital @ .% of PAT Stand by line of credit recommended @.% of above

Concessions in service charges proposed if any and

280

the Justification thereof

Term Loan: Details of Fixed assets Land Building Equipment Others Total Cost price/estimate (incl.taxes) Own funds Bank Finance

Comments on Debt/Equity:

Comments on DSCR (in brief):

c. Computation of LC limits for WC Total Purchase of stocks Purchase of Stocks under LC Average monthly purchase of stocks (A) Average holding of imported stocks Average usance period (B) Lead time and transit period (C)

281

Total of (B) and (C) = (D) The requirement of LC limit (A) x (D) Limit recommended

b) Assessment of BG limit Outstanding BGs as on Add: BGs required during the period Less: Estimated maturity/cancellation of BGs during the period Requirements of BGs Recommended BG limit

Brief comments on limits recommended

282

Terms and Conditions of Sanction a. SECURITY Facility Primary Collateral WDV MV Guarantee Name NW As on Valuation dated

Description of collateral security :

b. Deviation from existing security (if any)

c. MARGINS : FOR EACH FACILITY AS APPLICABLE) Cash Credit : Stocks Receivables (Cover --days) Letter of Credit BG Term loan Existing Proposed

d.

RATE OF INTEREST : facility Pricing

e. REPAYMENT SCHEDULE : f. INSURANCE g. SUBMISSION OF STOCK STATEMENTS h. INSPECTION j. PROCESSING FEE j. UPFRONT FEE 283

k. CONCESSIONS IN SERVICE CHARGES

Appraised by

Assessed by

Sanctioned by

Signature Name : Designation Date : State Bank of India, ______________ Branch

284

ANNEXURE TO APPRAISAL ANALYSIS OF BALANCE SHEETS Liabilites 20 / 20 / 20 /

State Bank of India Other Banks Sundry creditors Expenses Loans Other Liabilites Total Current liabilities (A)

Term Loans Others Total Deferred liabilities (B)

Capital & Surplus (C)

Total liabilities (A+B+C)

Assets

20

20

20

Cash Investments Stock Others Total Current Assets (D)

285

Net fixed Assets (E)

Miscellaneous assets (F) Intangibles (G) Total miscellaneous assets H = (G+F)

Total assets (G+|E+H)

Working capital surplus/deficit Tangible Net Worth (C-G)

(current assets current liabilities) Rs. . . Rs.

Capital Base :

1. 2. Profitability 3. 4.

Total liabilities/Tangible Net worth (Ratio) Sales / Tangible Net Worth

Net Profit/Sales (Ratio) Net Profit/Total capital employed (Ratio) (including current and deferred liabilities (Ratio)

5.

Net Profit/Proprietors capital employed (Ratio)

Current Position : As on . 6. 7. 8. Stock about .. months sales Sundry Debtors about .. months sales Sundry Creditors about . Months purchases

286

287

AGREEMENT

This agreement (the "Agreement") is made at ____________ on this _ day of ____ 200 [ ].

AMONGST :

......................................................................................., a corporation incorporated and carrying on business in India as a Scheduled Bank amongst other places at ....... (hereinafter called the "Bank", which expression shall, unless repungnant to the context thereof, mean and include its successors and permitted assigns), the party of the FIRST PART;

AND

Reliance Industries Limited, a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Maker Chambers acting through its duly authorized representative _____________ (hereinafter called the "RIL", which expression shall, unless repugnant to the context thereof, mean and include its successors and permitted assigns), the party of the SECOND PART;

AND

288

*Mr./Ms.M/s. _______________________, * a company incorporated under the provisions of the Companies Act, 1956 / a partnership concern / a sole proprietorship concern having its registered office / office at ______________________ acting through its duly authorized representative / partners / sole proprietor _______ (herenafter called the "Borrower", which expression shall, unless repungnant to the context thereof mean andinclude its successors / successors-in-interest / legal heirs, representatives and permitted assigns), the party of the THIRD PART.

[*Delete which ever is inapplicable]

Whereas RIL is interested in the setting up and running of retail. outlets for the sale of its products inter alia being Motor Spirit, High Speed Diesel, Lubricants and Auto Liquified Petroleum Gas (the "Products") at various places in India.

AND Whereas the Borrower has been selected for grant of dealership by RIL vide LOI dated _____ which has been issued by RIL and duly received and accepted by the Borrower and the Borrower & RIL has already entered into dealership agreement Dated ................ (the "Dealership agreement") with the Borrower.

AND Whereas the Borrower owns a piece of land bearing No. ____________ admeasuring about _________ situated at _______________ (the "said Land") and is bounded as under :

On the North : ___________

On the South : ___________

On the East : ___________

On the West : ___________

And Whereas the Borrower has agreed to run a retail outlet for the sale of Products at the said Land (hereinafter called the "Retail Outlet").

289

And Whereas towards construction of the Retail Outlet, payment of security deposit in terms of clause if the "Dealership Agreement and initial operational expenses of the Retail Outlet, the Borrower requires funds and thus has requested the Bank ot provide the Borrower with credit facilities.

And Whereas the Borrower has executed lease deed dated _________ for the Retail Outlet i.e. the said Land and the structure constructed or to be constructed thereon in favour of RIL.

And Whereas the Borrower has requested the Bank to provide it with the credit facility in a sum of Rs. ___________________ /- (Indian Rupees facility in a sum of Rs. _____________ (INdian Rupees ________________________only) (hereinafter collectively called the "Credit Facilities") for the purpose of construction over the said Land, making the security deposit to RIL and meeting the working capital requirements.

And Whereas relying upon the representations made by RIL and the Borrower in this Agreement, the Bank has agreed to grant the Credit Facility to the Brorrow on the terms and conditions in this Agreement.

NOW IT IS HEREBY AGREED BY AND AMONG THE PARTIES HERETO AS FOLLOWS :

1. The Bank agreed to grant to the Borrower the Credit Facilities, upon the terms and subject to the conditions hereof and upon/of the terms and conditions of the loan agreements, overdraft agreement, mortgage deed, instrument of hypothecation, letter of pledge, demand promissory notes, promissory notes, receipts acknowledgement of debt and securities, personal guarantee and other guarantees and security, deeds and documents executed/to be executed provided/to be provided between/by the Borrower and/to the Bank ("Credit Facilities Documents"), for an amount of Rs. ____________/(Rupees _______________________________________________only) an overdraft facility towards working capital for a sum of Rs._____________/- (Indian Rupees __________________________ only).

2.

The Borrower hereby agrees and undertakes to execute all the Credit Facilities Documents in the form and manner as may be required by the Bank from time to time.

3.

The entire amount of the Credit Facility provided by the Bank to the Borrower along with interest, fees, charges and expenses due thereon shall be repayable by the Borrower to the Bank in accordance with the provisions of the Credit Facility Documents. 290

4.

Not withstanding anything to the contrary contained in this Agreement and/or any other agreement executed/that may be executed between the Bank and the Borrower, and / or the Credit Facility Documents, the Credit Facility and all amounts outstanding there under are/shall always be payable by the borrower to the Bank forthwith on demand beind made by the Bank, which the Bank shall be entitled to make, without any cause or reason or default by the Borrower, at its sole and absolute discretion.

5.

The Borrower shall execute and/or cause to be executed at its own cost and expense such agreements, undertakings, instruments and forms as may be required by the Bank from time to time and in the form, manner and substance satisfactory to the Bank for creation/perfection of any security/further security by way of mortgage, hypothecation or otherwise over the assets/properties belonging to the Borrower as the Bank may require, from time to time including without limitation mortgage over the immovable assets of the Borrower, hypothecation of the Products and book debts/ receivables in favour of the Bank.

6.

RIL hereby represents, agrees, warrants and undertakes that unless the Bank expressly otherwise authorize RIL in writing :

i.

RIL shall pay all amounts due and payable by RIL to the Borrower on account of volume incentives (presently @ Rs.250/kl of all products for volumes in excess of 125 kl pm) and all other payments that may be paid/made by RIL to the Borrower by whatever name called (collectively called the "Dealer Dues"), directly to the account bearing no. _________________ of the Borrower maintained with the Bank (the "Dealer Account") or to such person or account as may be directed, in writing, by the Bank from time to time; Borrower hereby irrevocably agrees for such payment being made to Dealer account.

ii.

RIL shall not terminate the dealership agreement with the Borrower for the Retail Outlet or cease operations at the Retail Outlet unless written notice of such intention to terminate the dealership agreement has been given to the Bank simultaneously when RIL gives notice to the Dealer about termination.

iii.

RIL shall not refund any part of the security deposit or any other deposit or amount of any nature whatsoever to the Borrower except to such account and to such person (including the Bank) as may be required by the Bank and in the manner directed by the Bank in writing.

291

iv.

RIL shall, in the event of termination of Dealership with Borrower, pay the amount of rent for the Retail Outlet @ Rs.100/- per kl of all products or Rs.10,000/- per month whichever is more into the Dealer Account. The Bank shall be entitle d to appropriate this amount towards the outstanding amount due in respect of credit facilities.

v.

RIL can modify any material terms and conditions of the Dealership agreement only with prior consent of the Bank which consent shall not be unreasonably withheld. If the Bank does not respond to the notice of RIL to the Corporate Centre of SBI, seeking such consent within 10 days of notice seeking such consent, it will be deemed that SBI has consented for such modification.

vi.

RIL shall not handover possession of the Retail Outlet to the Borrower (other than as a dealer) except with the written permission of the Bank.

7.

In the event the Bank intimates to RIL that the Borrower has committed any default under the Credit Facility Documents and / or in repayment of any amount due and / or payable under the Credit Facility, and the said dealership agreement has not been terminated, RIL shall:

i.

continue to supply the Products to the Borrower at RIL's normal sale price.

ii.

raise Debit Notes on the Borrower with each sales quantity @ Rs. 150 per kl of all products for which the Borrower hereby expressly authorizes the RIL.

iii.

pay the amount collected from the Borrower towards Debit Notes to the Bank or such person or such account (including Dealer Account) as the Bank may direct, in writing, and the Bank shall be entitled to adjust the same towards the amount outstanding under the Credit Facilities.

8.

In the event the Bank intimates to RIL that the Borrower has committed a default under the Credit Facilities Documents and / or in repayment of any amount due and / or apyable under the Credit Facility and such default has not been rectified for a period of 3 (three) months and the Bank requests RIL to terminate the dealership agreement, RIL, no later than 30 (thirty) days from the date of receipt of notice in this regard from the Bank (such notice the "Default Notice"), shall stop supplying the 292

Products to the Borrower and shall terminate the dealership agreement with the Borrower. The decision of the Bank as to whether the Borrower has defaulted or not shall be final and binding upon RIl and the Borrower.

9.

That in the event RIl terminates or proposes to terminate the dealership agreement with the Borrower, for any reason other than in accordance with Clause 8, RIL shall intimate such termination to Bank simultaneously when RIL give notic eto Dealer about terminate of the dealership.

10.

That upon the termination or expiry of the dealership agreement/dealership of the Borrower, for any reason, including in terms of Clause 8 and / or 9 above.

i.

All amounts outstanding under the Credit Facilities shall forthwith become due and payable sby the Borrower to the Bank

ii.

RIL shall pay all the amounts payable by RIL to the Borrower (including Security Deposit), on whatsoever account, net of RIL's dues till the date of termination or beyond, directly to the Bank or the Dealer Account as may be required by the Bank in writing.

iii.

RIL shall provide all assistance to the Bank to enforce/foreclose the mortgage over the retail Outlet and hypothecation over the Products in favour of the Bank.

iv.

Upon successful enforcement/foreclosure of the mortgage by Bank, if the Retail Outlet is to be sold in pursuance of the enforcement of mortgage of the Bank over the retail Outlet in favour of the bank, RIL agrees to purchase the same at the value not less than amount outstanding under the Credit Facilities plus maximum three month interest (excluding overdue interest and penalty), and to apy the said amounts to be Bank.

The said period of 3 months shall commence from the date on which the entire amount under the term loan becomes due and payable by the borrower to the Bank, pursuant to the acceleration of the term loan by the Bank, as per the terms of the Credit Facilities document or otherwise. It is understood by the parties that the enforcement/foreclosure of the mortgage shall be through Court of law / DRT and RIL shall be entitled to purchase the said retail outlet which includes landk, building and machinery/equipments, if the Corut/DRT/its official permit/allow RIL to purchase the same and in respect of such sale to RIL, the cost of the sale i.e. Stamp Duty and 293

Registration Charges etc. shall be borne by RIL. However, RIL shall make all efforts to purchase the same through Court/DRT for the value not less than stated above.

Notwithstanding anything to the contrary contained in the Dealership Agreement, Lease Deed or any other agreement or understanding that may be executed or reached not or at any time in future, between the borrower and RIl, RIL hereby agrees that the Lease Deed shall stand terminated in the event of failure of the RIL to remedy breach under this clause within a period of thirty days from the date of the notice in wirting from Bank informing RIL of any breach of this agreement or default of RIL observing any of the above terms and conditions of this agreement. Such termination of the lease deed will entitle the Bank to enforce the mortgage free of any encumbrances rights created in favour of RIL and sale of the said land, building and equipment/machinery owned by Borrower will be without the leasehold rights in favour of RIL, and the purchaser will get good title to the said land, building, machinery/ equipment, when the said mortgage is enforced by the Bank.

11.

The Borrower hereby confirms that on termination of dealership agreement / dealership of the Borrower, the Borrower shall sell all the Products then lying in stock to RIL at the price the same were supplied to it by RIL less any commission/incentive paid thereon to the Borrower by RIL and all amounts payable by RIL to the Borrower for the same shall be paid by RIL to the Bank.

12.

That in the event, the Borrower has committed a default under the Credit Facilities Documents and / or in repayment of any amount due and / or payable under the Credit Facility and / or on termination or expiry of the dealership agreement, the Bank shall be fully and duly entitled to enforce the mortgage over the Retail Outlet as well as any and all other security that may be provided for the Credit Facilities by the Borrower and / or any other person and RIL will assist the Bank in enforcement of such security.

13.

RIL hereby agrees and undertakes that RIL shall act on the undertakings given herein above notwithstanding any contrary instructions issued by the Borrower in this regard.

14.

In consideration of the Credit Facility being granted by the Bank to the Borrower, the Borrower hereby irrevocably and absolutely represents, warrants, convenants and undertakes with the Bank and RIL that :

294

i. The Borrower is the absolute and sole owner of the said Land and the said Land is in its lawful possession and the said land is free from all encumbrances, mortgages, liens, arrangements, injunctions, notifications, acquisitions, prior agreements to sell, prior sales/leases and it is free to deal with the said Land in any manner it may deem fit;

ii.

The original of title deeds of the said Land are in lawful possession of the Borrower and the Borrower shall deposit the same with the Bank with an intent to create mortgage over the said Land in favour of the Bank, on or before the disbursal of any amount under the Credit Facilities or as may bee otherwise agreed by the Bank;

iii.

The Borrower shall create mortgage over the said Land and all construction and improvements made thereon and machinery affixed to the earth thereat from time to time shall also stand mortgaged in favour of the Bank. However such mortgage shall not extend to any equipment belonging to RIL'

iv.

The Borrower shall keep the Retail Outlet i.e. the said Land and construction, and improvements made thereon and machinery affixed to the earth thereat and the Products fully and comprehensively insured at all times, with the Bank as the Loss payee;

v.

The said Land can be used for setting up the Retail Outlet;

vi.

The Borrower confirms and certifies that though the Borrower is the owner of the said Land and shall also carry out construction thereon but since the said Land and the construction thereon has been/shall be leased by the Borrower to RIL, the Borrower is and shall at all times be using and occupying the Retail Outlet as a user and at the will and pleasure of RIL and forthwith on receipt of any notice by RIL, the Borrower shall remove itself and all its employees and representatives from the Retail Outlet, without any demur, protest and delay. Provided always on such removal Borrower shall not remove any of the equipment belonging to RIL or any of its furniture, improvements, stocks, stocks of Products, equipment, items, records, and the like, and shall leave the same as on the date of receipt of the said notice from RIL;

295

vii.

The Borrower irrevocably directs, instructs and authorizes RIL to do all acts, deeds and things as RIL is required to do in accordance with this Agreement including but not limited to termination of the Dealership Agreement and credit the amount of Dealer Dues only to the Dealer Account or any other account or pay the same to such person (including the Bank) or as may be directed, in writing, by the Bank from time to time, and in no other manner notwithstanding anything contrary contained in this Agreement and/or the dealership agreement and/or any other agreement/document that may be executed now or in future by / between RIL and the Borrower.

viii. The Bank, without prejudice to any of its other rights, shall be entitled to restrict and/or prohibit the Borrower from operating and/or making any withdrawals from the Dealer Account, without any prior or post notice to the Borrower, as and when the Bank may so deem fit, at its sole and absolute discretion, and from time to time and the Bank shall not be liable for dishonour of any cheque/payment instrument/instruction resulting from such restruction and / or prohibition.

ix.

The Borrower shall under no circumstances discontinue operations at the Retial Outlet unless the dealership agreement is first terminated by RIL;

x.

The Borrower hereby irrevocably authorizes RIL to do all acts, deeds and things in accordance with the terms hereof, notwithstanding anyinstructions to the contrary that it may have given/may give in future, to RIL;

xi.

In the event Default Notice has been served by the Bank on RIL, any Products, for which payment has been made by the Borrower to RIL but not supplied by RIL, RIL shall not supply the same to the Borrower and shall hand over such payment directly and only to the Bank;

15.

Until credit facility/any of the Credit Facilities are available to the Borrower and till all amounts there under or arising there from have been paid in full to the Bank, to the satisfaction of the Bank, the Bank shall have a first and paramount lien and a right of set-off on all bank balances, including but not limited to amounts lying in the Dealer Account, fixed deposits with the Bank, property, assets and the like of the Borrower that are or may come into possession of the Bank from time to time, irrespective of them or any one or more of them being held in safe custody by the Bank or otherwise, and the Bank shall also have a right to get any or all of them registered in the name of the Bank or its nominees.

296

16.

The term of this Agreement shall come into force from the date of this Agreement and shall continue in full force and effect till such time any amount remains outstanding under the Credit Facility or the Credit Facility remains available to the Borrower.

17.

This Agreement shall not be amended, altered or modified expect b y an instrument in writing expressly referring to this Agreement and signed by all the parties hereto.

18.

If at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable under the applicable law or judicial/administrative / governmental directions, neither the legality, validity nor enforceability of the remaining provisions of this Agreement shall in any way be affected or impaired thereby.

19.

All approvals internal and corporate have been taken by the Borrower for availing of the Credit Facility and for execution of this Agreement and the Credit Facility Documents and creation of mortgage over the said Land and creation of security over its other assets.

20.

The provisions of this agreement are without prejudice to any right that the Bank has/may have, to recover its dues outstanding under the Credit Facility from the Borrower and/or to enforce the security created/that may be created in favour of the Bank, in accordance with the Credit Facility Documents and/or in law.

21.

Notwithstanding anything to the contrary contained in the Dealership Agreement or the Lease Deed or any other agreement or understanding that may be executed or reached, now or at any time in future between the Borrower and RIL, RIL and the Borrower shall act in accordance with the terms of this agreement.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed the day, month and year first above written.

Signed and Delivered by the Bank

Signed & Delivered by RIL

through Authorized Signatory Mr. ________ ___________ 297

through Authorized Signatory Mr.

Signed & Delivered by the Borrower

through Authorized Signatory Mr. ________

Signed & Delivered by the Land Owner through Authorized Signatory Mr. ________

DEALER FINANCING Tie-up with Bharat Petroleum Corporation Limited (BPCL) 298

To Extend Working Capital Facility for Petroleum Dealers

BPCL is engaged in the business of refining and distribution of petroleum products through its 6000 strong network of petroleum dealers. Bank has entered into a tie up with BPCL to provide working capital finance to all their dealers.

02. According to BPCL most of these dealers are under stocking resulting in inefficiencies in supply chain. A major reason for this has been cited as lack of credit. This presents us with an opportunity to extend finance and garner significant business. Each of these dealers requires funding for 3 to 5 days of stocks, i.e. Rs.10.00 lakhs approximately, on an average.

03. BPCL would circulate the terms and conditions of the arrangement and schedule of charges (attached herewith as Annexure-I and Annexure-II respectively) to all its dealers. Under the tie-up, BPCL shall extend the following comforts to the Bank:

a) b)

c) d)

e)

f)

Provide duly filled up Opinion Report cum Comfort Letter (format attached herewith as Annexure-III) for every Petroleum Dealer willing to take finance from SBI. Intimate SBI about termination of a Petroleum Dealers dealership or any other disciplinary action against a petroleum dealer like suspension, as soon as the decision is taken about it. Such intimation shall take place by writing letter simultaneously to the financing branch and Local Head Office of SBI. In case of petroleum dealers availing working capital limit from SBI, BPCL will not supply goods on credit basis, either partly or fully and such supplies will be made against advance payment only. In case of default by Petroleum Dealers (default shall be defined as inactivation of account or non-payment of interest for more than 30 days), BPCL will make future supplies to the dealer only if payments are received by BPCL in advance from the cash credit account of borrower with SBI, BPCL shall put moral pressure on Petroleum Dealer to pay back his over dues and reactivate the account with the bank. In the event of default by the Petroleum Dealer (the letter addressed by the bank to the BPCL as to default by the dealer in making payment of dues etc is sufficient conclusive proof of default by the Petroleum Dealer and BPCL shall undertake all such activities required of BPCL to help recover the dues), Bank will seize such goods of dealers financed by bank and BPCL shall purchase the said seized goods from bank, subject to the goods meeting the quality parameters, at realizable price. Not withstanding anything contained in the agreement between BPCL and the Petroleum Dealer, BPCL undertakes, in case of default and or termination of such dealership, not to repay any dues (such dues shall include security deposit also) to the borrower without taking prior approval of Bank. BPCL would make all such amount available to the financing branch of Bank towards recovery of dues, if any, after setting off all moneys due to BPCL.

04. As the ticket size of loans will be less than Rs.25.00 lacs, there will be no need for carrying out CRA for such loans. For all limits above Rs.25.00 lacs CRA exercise has to be carried out as per extant instructions. The limits can be sanctioned based on their 299

present turnover and inbuilt cushion of 25% (explained in Annexure-I), so as to account for price increases. Such limits can be availed by the customers both as Fund or Non Fund Based limits or a combination of both, subject to the exposure being taken are within the overall sanctioned limits. All documents as per SME Documentation should be obtained and KYC norms duly complied with.

05. In cases where CRA exercise has been carried out the interest rates to be charged are as follows:

Rating as per CRA SB 1 and SB 2 SB 3 and SB 4 SB 5

Interest Rates to be Charged 0.75% below SBAR, currently 10.00% p.a. 0.25% below SBAR, currently 11.00% p.a. 0.75% below SBAR, currently 11.50% p.a.

06. All proposals under the tie-up will be handled by SECC/SMECC as the case may be, where such processing centres are established. This will apply irrespective of turnover being higher than stipulated Rs.25.00 crores. A simplified application form is attached herewith as Annexure IV. A format for carrying out appraisal and the interest rate matrix for arriving at relevant interest rates is attached herewith as Annexure V.

07. The applicable interest rate for such loans can be decided by using the following simple matrix:

Opinion Report on Cheques Return Never

Adverse Opinion Report on Quality Standards Never

Interest Rates (FloatingLinked to SBAR) 0.75% below SBAR i.e.10.00% p.a. 0.25% below SBAR i.e.11.00% p.a. 0.25% below SBAR i.e.11.00% p.a. 0.75% below SBAR i.e.11.50% p.a. Not eligible

Never

Upto twice a Year

Upto twice a year

Never

Upto twice a year

Upto twice a year

Upto twice a year

More than twice a year

300

Never More than twice a year More than twice a year More than twice a year

More than twice a year Never Upto twice a year More than twice a year

Not eligible Not eligible Not eligible Not eligible

The data required for above calculation, is a part of the Corporate Opinion Report to be provided by BPCL and as such the branches need not collect this data. The detailed format is attached herewith as Annexure-II.

08. Based on the above, cash credit accounts for the Petroleum Dealers in the area of operations of the Circle may be opened in appropriate branches as per convenience of the dealers. Wherever, the branch is CINB enabled, internet banking facilities should be extended to the dealer which will enable him make free remittances to BPCL. Special care should be taken to ensure that payments from the cash credit account can only be made to designated BPCL account maintained with Bank. This restriction will be applicable irrespective of whether payment is being made using CINB or through cheques or drafts or STEPS. The designated account of BPCL in which payment is to be made will be intimated in due course.

09. In case of default by the Dealer (default shall be defined as inactivation of account or non-payment of interest for more than 30 days), the branch should immediately inform the local office of BPCL and SME BU at LHO. Under the arrangement, on intimation, BPCL shall restrict supplies to dealer. They will affect supply only against payment received from designated Branch of SBI where the dealers account is parked.

10. In such cases, dealers would first be forced to regularize their account by making deposits into their loan account. From the deposits so made, branch can deduct up to 25% towards adjustment of irregularities in the account and make available 75% for remittance of BPCL towards further supplies. Once the account becomes normal, regular operations can be permitted.

11. In case a dealer defaults twice, the Branch should endeavour to discontinue the borrowing arrangement by asking the dealer to close the account. Intimation about the proposed plan of action should be sent to BPCL and SME BU at LHO.

301

****************************************************************************************

WORKING CAPITAL FINANCE TO DEALERS OF BHARAT PETROLEUM CORPORATION LIMITED

Purpose Nature of facilities Segment Eligible finance amount

To provide working capital facility to Petroleum Dealers Cash Credit SME of Upto 80% of working capital requirements for stocks/advances paid for stocks. Assessment would be based on 5 to 7 days of turnover taking into account the past turnover of the dealer with 25% cushion for price increase. Past turnover will be made available by BPCL as a part of Corporate Opinion Report. On demand, renewal every year. As per scheme of delegation of financial powers for working capital Interest rates within the band of 10.00% p.a. (currently 0.75% below SBAR, minimum 10.00%) to 11.50% p.a. (currently 0.75% above SBAR) with monthly rests. In case, at least 50% collateral can be provided by the dealer, the interest rate can be reduced on a case to case basis by 50 basis points from their eligible interest rates, subject to a lower limit of 9.50% linked to SBAR with monthly rests. In case, the interest is not paid by the dealer within the period of 15 days, enhanced interest at the rate of 2% will be levied from the 16th day onwards with monthly rests. 20%

Repayment Sanctioning Authority

Rate of interest

Margin

302

Security

Tenure Insurance

a) Primary : Hypothecation of stock/s other assets of the Petroleum Dealer b) Collateral / Guarantees : Personal Guarantee of dealers 15 days The assets created out of Banks finance are to be insured for full market value, against all risks. Revised SME Documents As per Banks extant instructions Rs.300/- per lac to be paid in the first year and on renewal every year. BPCL will provide Opinion Report cum Comfort Letter and other support as detailed earlier. Nil for payment through e-banking platform of SBI Rs.100/- transfer when payment made by STEPS In case of remittances through any other mode, normal charges of SBI are applicable. However, the branch where the dealer avails the channel financing facility, at its sole discretion, may reduce/waive the same. For dealers availing OD upto Rs.5 lacs Free upto Rs.1 lac/day and Rs.20/lac thereafter For dealers availing OD more than Rs.5 lacs Free upto Rs.3 lac / day and Rs.20/ lac thereafter.

Documentation Review Processing charges

Others

Remittance Charges

Cash charges

handling

303

Annexure III Opinion Report Cum Comfort letter (on Letter Head of BPCL) 1. 2. 3. 4. 5. 6. Name and address of dealer Name of key persons and their designations Territory assigned to dealer Year of appointment of dealer Identification Code Range of products stored (please tick) a. Diesel b. Lubes c. Petrol d. Others (Please specify) . Sales through dealer (last two years and current year till date) Brand Name Unit Sales (Year till date) Diesel Qty in KL Value (Rs.Million) Petrol Qty in KL Value (Rs.Million) Lubes Qty in KL Value (Rs.Million) Others Qty in KL Value (Rs.Million) 31.03.2006 31.03.2005

7. Conduct of Dealer (Past 12 months) Cheque returns (Please tick) More than twice a year Upto twice a year Never

Delay in Payments (Please tick) More than twice a year Upto twice a year Never

Quality related issued (include events like notices for poor quality/adulteration, temporary suspension) More than twice a year Upto twice a year Never

304

8. Limits recommended (Final decision as per banks policy) 9. Peak Limits recommended (Final decision as per banks policy) We hereby confirm that the information given above is true to the best of our knowledge and shall be treated strictly private and confidential and without any liability on the part of Company for any credit decision taken by bank and accept the terms and conditions as started in MOU signed by Bank and BPCL dated :

Name of the Authorised Official : Mr/Mrs _____________________________ Designation _________________________ Date : Office Stamp and Seal Signature

305

Annexure IV STATE BANK OF INDIA

. BRANCH

APPLICATION CUM INTERVIEW FORM FOR FINANCING OF WORKING CAPITAL FACILITY TO THE PETROLEUM DEALERS OF BHARAT PETROLEUM CORPORATION LTD (BPCL) UNDER SBI-BPCL TIE UP ARRANGEMENT.

1.

Name of the unit

Identification Code : 2. Address of the unit

Ph. No:

Fax No.

Email / Website Premises owned/returned 3. Address of Regd. Office in case of Corporates

Premises owned/returned 4. Address for correspondence

Ph. No.

306

Fax No.

E-mail / Website

5.

Other business, if any

6.

Year of Business

Commencement

of

7. 8.

Experience in the line of activity Constitution

DETAILS OF PROPRIETOR / PARTNERS / DIRECTORS

Name & Qualification

Age

PAN

Residential Address

Phone / Mobile

Net Worth

(Opinion report on the banks prescribed format should be prepared) DETAILS OF EXISTING BANKING ARRANGEMENTS

Name of the Bank/Branch

Faciliity

Limit

Outstanding

Banking since

307

DETAILS OF ASSOCIATE/SISTER/IDENTICAL FIRMS

Name of the unit

Name of the Prop/partners

Banking with

Limit

Outstanding

Particulars of registration under Shops & Establishment Act/Sales Tax Act / Any other Act.

Position regarding Statutory Assessment Under IT/Sales Tax/Any other Year upto which assessment completed

Distance of the unit from the distribution point Mode of Transportation Storate Capacity of the Unit No. of tanks

k.m.

k.l. Mode of payment to BPCL (please specify)

308

TERMS OF SALES

% of Credit sales to total sales

Period of Credit given Months Average level of receivables Rs.

Range of products : a. Diesel others(Please specify)

b. Lubes

c. Petrol

d.

Brand Name

Unit 31.03.05 (A)

Sales 31.03.06(A) 31.03.07(E)

Diesel

Qty in KL

Value (Rs)

Petrol

Qty in KL

Value (Rs)

Lubes

Qty in KL

Value (Rs)

Others

Qty in KL

309

Value (Rs)

CREDIT FACILITIES REQUIRED

Fund based Cash Credit

Limit required

Peak limit required (if any)

DETAILS OF SECURITY OFFERED

Primary

Colleteral

IMMOVABLE PROPERTY

Description of Property

Name of the Owner

Value of the Property

Basis of valuation

(Rs./lacs)

310

LIQUID SECURITIES Description Name of the Face Value Owner When acquired Present value

LIQUID SECURITIES

Name of the Guarantor & Address

Age

Qualification

Net worth

Banking with

I/We declare that the information given in the application form are true, correct and complete and that they shall from the basis of any kind of facility State Bank of India may decide to extend to me/us. I/We shall furnish all other information that may be required by the Bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards/action for recovery of bank dues including publication of defaulters names in website/submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I/We confirm that I/We are not defaulter of any bank/any financial institution. I/We confirm that there are no over dues / statutory dues owned by me/us and I/We have/had no insolvency proceedings against me/us not have I/we ever been adjudicated insolvent. I/we undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me/us.

Date : Place : Signature of the Borrower

311

Name of the interviewing Official Designation : LIST OF DOCUMENTS TO BE ATTACHED

1. Partnership deed in original (to be returned) and a copy thereof 2. Memorandum & Articles of Association with Certificate of incorporation in original (to be returned) and copies thereof. 3. Copies of the balance sheet (s) of the firm / company for past three years 4. Latest copy of Income tax, sales tax assessment order etc. 5. Statement of account from the existing banker for last 3 months 6. Photocopies of PAN card of partners / Directors wherever available 7. Statement of personal assets and liabilities of proprietor / partners / directors / guarantors 8. 2 copies of photographs of proprietor / directors / partners 9. Copies of the relevant license / statutory clearances, documents pertaining to ownership / Tenancy / lease agreement in respect of premises where activity will be carried out / Service or trade related agreements etc. 10. Copy of Title deeds relating to collateral security being offered.

312

Annexure V APPRAISAL

Segment : SBF/C&I Sector : Priority / non priority Name of the unit / borrower :

Assessment of Working Capital (Cash Credit)

1. Performance and Profitability (Rs.in lacs) Years (a) Sales / Income (b) Other income % increase in a c) Net profit d) Depreciation e) Cash Accruals (d + e) f) NWC g) Current Ratio 31.03.05(A) 31.03.06(A) 31.03.07(E)

Note : Where the dealearship is not generating adequate profit, appraising official should examine the feasibility of the unit before recommending the limit. WORKING CAPITAL REQUIREMENT

a) Estimated Annual Turnover : Petrol Diesel Lubes# b) Required working capital (5 to 7 days

313

average turnover) @ For Petrol/Diesel #for Lubes c) Add cushion for price increases

d) Total Working Capital requirement (b+c)

e) Borrowers margin 20%

f) Eligible Bank finance (d-e)

g)

Recommended limit

@ Depending on the distance of the unit from the delivery point # For arriving at the finance needed for stocking lubes, the period may range from 1 month to 45 days, depending upon past trends. Terms and conditions of Sanction

I. SECURITY Primary Collateral Guarantee Name Net worth (as on )

II. OTHER TERMS AND CONDITIONS:

Rate of Interest (as per matrix) Margin (20%) Tenure Insurance 15 days The assets created out of Banks finance are to 314

be insured for full market value, against all risks Review Documentation Processing charges Others Submission of stock statements Opinion report cum comfort letter from BPCL

Inspection Remittance Charges Cash handling charges Concessions in service charges (if any)

Remarks :

Appraised by

Assessed by

Sanctioned by

Signature

Name Designation Branch : Date

: :

: RISK MATRIX FOR APPLICABLE INTEREST RATE

Name of the Unit/Borrower :

315

Opinion report on cheques return

Adverse opinion report on quality standards Never

Interest rates (Floating-linked to SBAR) 0.75% below SBAR i.e. 10.00% p.a. 0.25% below SBAR i.e. 11.00% p.a. 0.25% below SBAR i.e. 11.00% p.a. 0.75% below SBAR i.e. 11.00% p.a.

Applicable rate

Never

Never

Upto twice a year

Upto twice a year

Never

Upto twice a year

Upto twice a year

Upto twice a year

More than twice a Not Eligible year More than twice a Not Eligible year Not Eligible

Never

More than twice a Never year More than twice a Upto twice a year year

Not Eligible

More than twice a More than twice a Not Eligible year year

Pricing (as per Matrix)

Available Collateral Security : ( % of loan amount) ____________________________

Effective Interest rate

Note : Interest rate can be reduced by 50 basis points if collateral securities are available at least 50% of the loan amount.

316

Share of SBI in inventory funding

Share of SBI as % of total cash credit limit for inventory financing of dealer

If 100% is funded by SBI

20 marks

If 75% or more is funded by SBI

15 marks

If 50% or more is funded by SBI

10 marks

If 25% or more is funded by SBI

5 marks

If less than 25% is funded by SBI

0 marks

Score 80 or more Marks

Interest Rate (at SBAR of 11%) Minimum 9.50% p.a. SBAR) linked to SBAR (1.50% below

60-79 Marks

Minimum 10.00% p.a. (1.00% below SBAR) linked to SBAR Minimum 10.50% p.a. (0.50% below SBAR) linked to SBAR Minimum 11.00% p.a. (SBAR) linked to SBAR Application to be rejected

40-59 Marks

20-39 Marks

Below 20 Marks

Annexure 4

Last 12 months Sales Next 6 months projections Last 3 year Financials (Latest Yr + Last 2 Years Audited) with Schedules

317

CA Certified Networth Statement of Directors / Partners MOA & AOA / Partnership Deed LOI issued by Manufacturer in case of a newly appointed dealership

318

Annexure 5 (On the Letterhead of borrowing company)

Date : To : The Branch Manager, State Bank of India Branch Dear Sirs, Distributor Financing Programme

We refer to your letter no _______________ dated _____________ and thank you for offereing us a credit facility under your Distributor Financing Programme to finance our purchases from Tata Motors Limited.

We request you to make payments directly to the designated account to Tata Motors Limited as per the details of invoices provided by them through electronic form. I/We hereby confirm to pay to you all dues as per these invoice details raised by Tata Motors Limited on us on the agreed credit terms with you. We also confirm that all commercial disputes will be settled directly with Tata Motors Limited and we will pay SBI the full value of Invoices discounted.

Yours faithfully,

(Authorised Signatory with rubber stamp)

DOCTOR PLUS
1. Target Group : Medical practitioners of any discipline, promoters of hospitals, nursing homes, pathological clinics, polyclinics, X-ray labs, etc. Individuals, partnerships, corporates, trusts with powers to borrow Promoters should be registered practitioners and should possess minimum qualification to practice in a discipline such as 319

Eligibility

MBBS/ BDS/ BAMS/ GAMS/ BHMS

Purpose

For purchase of equipment For setting up clinic, nursing home, path. Lab, drug store, ambulances, computers, vehicles, etc. Expansion/ renovation of existing premises Medium Term Loan Cash Credit

Type of facilities

Quantum of Finance

a. In Metro/ urban for Corporates and partnerships only: Maximum of Rs.10 crores of which a sub ceiling for working capital limits at 10% of total loan amount for up to Rs.1 crore 5% of total loan amount for above Rs.1 crore b. (1) In Metro/ urban for individuals (2) In Other centres for Corporates/ partnerships/ individuals: For b. (1) and (2) maximum of Rs.5 crores of which a sub ceiling for working capital limits at 10% of total loan amount for up to Rs.1 crore 5% of total loan amount for above Rs.1 crore c. For Non Allopathic doctors (Unani, Ayurvedic, Homeopathic): Maximum of Rs.10 lacs of which a sub ceiling for working capital limits at 10% of total loan amount.

Margin

Up to Rs. 10 lacs: 15% Above Rs.10 lacs upto Rs.5 crs: 20% Rs.5 crs. Rs.10 crs: 25%.

Rate of Interest

For limits up to Rs.25 lacs: Based on Credit Scoring Model.

320

(See Annexure 2) Minimum score of 40 on credit scoring model to be eligible for the loan. For limits above Rs.25 lacs and up to Rs.10 crores: Pricing will be based on CRA rating. For CRA Rating below SB 8 will not be considered. (See Annexure 3) 8 Security: - Primary - Collateral : Hypothecation of Assets financed by the Bank No tangible collateral security for loan amounts up to Rs.25 lacs They are to be covered under CGTMSE. CGTMSE fees to be borne by the borrower. For loans above Rs.25 lacs and upto Rs.1 Crore: tangible security for at least 25% of the loan amount. Alternatively, eligible accounts may be covered under CGTMSE scheme. For loans sanctioned to Micro & Small Enterprises above Rs.1 Crore: Tangible collateral security of at least 25% and Personal guarantee of promoters. 9 Processing fees 0.5% of loan amount minimum Rs.500/- & maximum Rs.50,000/Minimum DSCR 1.5:1 Maximum period up to 5 years (including moratorium period): For buying equipments and expansion/ renovation/ modernization of existing premises Maximum period up to 7 years (including moratorium period): For setting up clinic, nursing home, pathology labs, drug store and other infrastructure Maximum moratorium 12 months 11 12 Documentation Special features : : As per SME documentation Eligibility as per credit scoring model Minimum score of 40 for limits upto Rs.25 lacs For above Rs.25 lacs, CRA model is applicable

10

Repayment

321

13

Insurance

Insurance of assets purchased out of bank loan and in respect of vehicles, comprehensive insurance as laid down Half-yearly inspection/ monitoring to ensure end use of funds 50% concession on the card rates.

14 15

Inspection Upfront Fee/ Processing Charges

16

Disbursement

Operating unit can make multiple disbursements over a period of 24 months form date of sanction based on requirements. But schedule of disbursement and purpose has to be specified at time of sanctioning of loan.

CREDIT SCORING MODEL ( For loans upto Rs.25 lacs)

Name of the doctor/ company / firm ----------------------------------------------------------------Name of the Chief promoter-----------------------------------------------------------------------------

(i)

Personal details of chief promoter:

S.No.

Parameter

Criteria

Marks

Max. Marks

Marks Scored

322

1.

Owning a house

Own

Not owning

2.

Academic qualification

Super specialist

PG / addl. Qualification

Graduate

3.

Field of practice

Allopathy

Homeopathy

Ayurveda

Others (Unani etc.)

4.

Experience / Practice

> 10years

5 10years

3 5 years

< 3 years

323

5.

Employment Details of Spouse / Close Family Members

Employment Details of Spouse Employed 2 Not employed Whether any Close Family Member is a medical practitioner at the same centre? Yes No Close Family Member include spouse, parents, brother, sister and In-laws. 2 0 0

6.

Assessed for Income tax

Assessed

Not assessed

7.

Has Life Insurance Policy (Surrender value of Policy (SV) to loan amount (LA))

SV to LA => 70% SV to LA => 50% SV to LA => 30% SV to LA => 10% All other cases (including no LIC Policy) No

2 1.5 1.0 0.5 0

0 5

8.

Loyalty

Deposit/Advance dealing with SBI/SBI cards More than 5 years

324

3 5 years 1 3 years Upto one year Bonus points for SBI customers: Availing one or more Housing Loans with SBI/ With a PPF or FD balance of Rs.5 lakhs and above with SBI Availing more than one advance/ deposit products with SBI Availing any one advance/ deposit products with SBI

2.5 2.0 1.5 1.0

2.5

2.0

1.5 Total ii) Business Scoring: S.No. Parameter Criteria Marks Max. Marks 1. Premises where practicing done Owned / leased for >5 yrs 3 3 Marks scored 32

Owned but mortgaged Rented

2 1

325

2.

Operating profit (pre tax)

Continuous for > 3 yrs For 2 yrs One for last yr

5 3 2

3.

Income showing a rising trend

Last 3 years

Last 2 years Last year 4. TOL /TNW (quasiequity to be added to TNW & reduced from TOL) <=2 >2 & <=3 >3& <= 4 >4 & <=5

3 1 4 3 2 1 4

5.

Repayment period

Upto 5 years 3 5 years 5 7 years

5 4 2

6.

DSCR

>=2 >=1.5 & <2 >=1 & <1.5 <1

5 4 2 0

7.

Collateral Value of Property/ (of TDR or cash equivalent offered as security viz RD/

>=75% >=50% & <75% >=25% to < 50% <25%

13 9 5 3

13

326

Relief Bond, NSC, etc multiply by 2 and add to the collateral value) 8 Association with Reputed Hospitals/ Medical Institutions

NIL

Associated for more than 10 years Associated for more than 5 years Associated for more than 3 years Not associated

0 8 TOTAL

Loyalty: S.No. Parameter Criteria Marks Max. marks 10 Marks scored

Deposits Advances dealing with SBI / SB cards

More than 5 years 3 5 years 1 3 years Upto one year

5 3 2 1

Bonus points for SBI customers HLs / PPF/TDR Rs. 5 lacs > one deposit/ advance prdct Availing any one product Total 10 5 4 3

Note: In case of any of the above parameters is not applicable, the scoring should be normalized out of 75 Applicable.

327

Hurdle Score for each section: Personal Details: Hurdle Score 15 out of 32 Business Scoring: Hurdle Score 20 out of 43

Interest rate matrix & financial decision for loans upto Rs.25 lacs

Score

Interest Rate

65 & above

3.25% above Base Rate with a minimum of 10.85%

55 - 64

3.50% above Base Rate with a minimum of 10.85%

45 54

3.75% above Base Rate with a minimum of 10.85%

35 44

4.25% above Base Rate with a minimum of 10.85%

Below 40

No finance

Annexure 3 For loan above Rs.25 lacs and up to Rs.10 crore:

328

CRA Rating (New Model)

Rate of Interest (Base Rate = 7.60%p.a.)

SB1 to SB2 SB3, SB4 & SB5 SB6 & SB7 SB8 * No finance below SB8.

(3.25% above Base Rate) 10.85% p.a. (3.50% above Base Rate) 11.10% p.a. (4.00% above Base Rate) 11.60% p.a (4.50% above Base Rate) 12.10% p.a.

*************************************************************

APPLICATION FOR DOCTOR (+) PLUS


Personal Details

1. Name of the Unit

2. Constitution

Individual / Partnership/ Company

3. Address: Business

329

Telephone No. & Mobile Number

Address; Residential

Telephone / Mobile No. e-mail

4. Registration No. of Medical Practitioner

5.

Owning a house

Own Own (not mortgaged) Not owning

6.

Academic Qualifications (medical fields) Graduate (MBBS/BMS/Other) PG Specialisation

7.

Spouse Detail

Doctor Employed Not Working

8.

Income Assessed Under IT

Yes No

330

9.

Taken Life Insurance Policy

Yes No

331

10. Whether belongs to

SC / ST Minority Community Male Female Ex-Service man

11. Banking with SBI Details of Deposit A/c (Including SBI Card) Since

Loan A/c Since

Loans Repaid

12.

Description of activity

13. Experience in Medical Practice

Over 10 years 5 10 yrs 3 5 years Less than 3 - 5 yrs

14. Premises where practice is done

Owned

332

Leased > 5 yrs (but mortgaged) Rented

15. Project Details

Cost of Project Fixed Assets

Amount (Rs.)

Means of Finance

Amount (Rs.)

Working Capital Current Assets Term Loan Others

16. Track Record Year 1 Income Operating Profit (Pretax) Year 2 Year 3 Year 4 Year 5

333

17.

TOL
TNW (Quasi equity to be added to TNW and reduced from TOL) DSCR

18.

Amount of Loan required

19.

Repayment Period

Upto 3 yrs 3-5 yrs 5-10 yrs

20.

Collateral Value of Property (TDR or cash equivalent is offered as security viz. RBI Relief Bond, NSC etc. multiply cash equivalent, by 2 and add to the collateral (value)

Rs.

% of loan

21. I / We Certify (i) all information furnished by me / us is true, correct and complete; (ii) I / We have no borrowing arrangement for the unit with any Bank as except indicated in the application; (iii) there are no over dues / statutory dues against me / us; (iv) No legal action has been taken against me / us (v) I / We shall furnish all other information all over information that may be required by Bank a connection with my application; (vi) the information may also be exchanged by you with any agency you may deem fit (vii) You, representatives of any other agency as authorized by you may at any time inspect verify my / our assets, books of account etc. in our business premise as given above (viii) You may take appropriate safeguards / action for recovery of Banks dues 334

including publication of defaulters name in web site / submission to RBI, (ix) / We further agree that my / our loan shall be governed by the rules of State Bank of India which may be in force from time to time.

Place : __________________

Date : __________________

Signature of Borrower (S)

Documentary proof in the form of originals with self attested copies has to be produced for verification. Originals to be returned and attested copies filed along with application. Data to be attested and furnished only in respect of key promoter.

SBI-SIEMENS MEDICAL EQUIPMENT PLUS

1.

Target Group

Prospective buyers will be identified by Siemens who will refer the buyers to the branches of SBI. These will be drawn from doctors in private practice, nursing homes, hospitals, diagnostic centres preferably those who are banking with us

Eligibility

Individuals / partnerships / corporates / trusts Commercial viability will have to be established before sanctioning the loan. Due diligence should be done by the Branch manager before sanction of the loan.

Purpose

To purchase medical equipment

Type of facilities

Term Loan

Quantum of Finance

The cost of equipment on offer by Siemens ranges between Rs.10 lacs to Rs.10 crs.

335

Loans for non medical practitioners for purchase of equipment costing upto Rs.20lacs will be treated as SBF advance. Loans to medical practitioners whose borrowings do not exceed Rs.10 lacs in urban and metro centres and Rs.15 lacs in rural and semi-urban centres are also to be treated as SBF advances. Under this tie up arrangement, all loans upto Rs.25 lacs will be covered under the Doctor Plus scheme. Loans over Rs.25lacs will be considered under C&I segment and will be appraised as per the norms applicable to C&I advances. Provision for contingencies to the extent of 5% may also be considered on case to case basis. DSCR 1.75 6 Margin : 20% Debt Equity 3:1

Rate of Interest

As per Doctor Plus scheme

Security: - Primary - Collateral

: Hypothecation of assets financed by the Bank

For loans upto Rs.10 lacs NIL For loans over Rs.10 lacs Tangible security for at least 50% of the loan amount 9 10 Processing fees Repayment Waived 5 to 8 years including a moratorium period not exceeding 1 year

11 12

Documentation Special features

: :

As applicable to term loans in SBF / C&I segment Equipment covered Price range (Rs. in lacs)

336

CT Scan MRI Scan Cathlab Linear Accelerator B&W ultra-sound Colour Doppler X ray Ventilator Ultrasound scanner Locations to be covered:

100 - 400 200 650 220 330 400 - 700 60 - 100 150 650 20 350 80 130 15 - 40

New Delhi, Dehradun, Chandigarh, Patiala, Ludhiana, Kanpur, Lucknow, Jaipur, Jodhpur, Chennai, Bangalore, Hubli, Hyderabad, Visakhapatnam, Kakinada, Kochi, Trichy , Thrissur, Thiruvananthapuram, Coimbatore, Kolkatta, Patna, Bhubhaneswar, Ranchi, Mumbai, Goa, Nagpur, Pune, Indore, Ahmedabad, Vadodara Any other location can be added if required. 13 Methodology Operation of account and the Siemens will identify and furnish application to SBI. SBI shall process the loan application and if found acceptable, the Bank will sanction the loan within 15 days and convey the sanction to the borrower and Siemens Thereafter, the borrower will have to complete documentation and margin requirements Siemens will then dispatch the equipment directly to the buyer/ borrower and forward proof of dispatch along with proforma invoice to the branch. The Bank will have to pay the amount directly to Siemens by means of a draft or Bankers Cheque within 3 days of receipt of the proof of dispatch.

Product highlights: Our Bank is the largest financier for medical practitioners and in order to maintain and further enhance our product profile to this segment of borrowers, the Bank has entered into a tie up arrangement with M/s. Siemens Ltd. which is in itself a globally recognized manufacturer of hitec medical equipment, for financing purchase of their products by medical practitioners, nursing 337

homes, clinics, diagnostic centres, etc. Siemens will identify the prospective buyers and refer them to the Bank who will consider the proposals on merits and if found acceptable, will sanction the required term loan .the proceeds of the term loan , together with the margin money component will be directly forwarded to Siemens after the receipt of the equipment by the borrower within 3 days. Loans upto Rs.25lacswill be considered under Doctor plus scheme and for amounts above that C&I norms will apply.

SBI-DENTAL EQUIPMENT PLUS


TIE UP with Confident Dental Equipment Ltd.

1.

Target Group

Qualified dentists with a minimum of BDS degree and qualified to practice as a medical practitioner

Eligibility

Individuals / partnerships / corporates / trusts Commercial viability will have to be established before sanctioning the loan. Due diligence should be done by the Branch Manager before sanction of the loan.

Purpose

To purchase medical equipment required for dentistry

Type of facilities

Term Loan

Quantum of Finance

Rs.10 lacs maximum

DSCR 1.5 6 Margin : Upto Rs.25000/Upto Rs.5lacs Over Rs.5 lacs nil 10% 20%

338

Rate of Interest

Repayable below Repayable 3 yrs beyond 3 yrs Upto Rs.50000/1.75%below SBAR 1.25%below SBAR 1.25%below SBAR 0.75%below SBAR

Above Rs.50000/upto 2 lacs

Above Rs.2 lacs upto Rs.5 lacs Above Rs.5 lacs and upto Rs.10 lacs 8 Security: - Primary - Collateral NIL 9 10 Processing fees Repayment Waived :

1%below SBAR

0.50% SBAR 0.50% SBAR

below

SBAR

above

Hypothecation of assets financed by the Bank

5 to 10 years including the moratorium period not exceeding 1year

11

Documentation

As per simplified SME Documentation

12

Special features

The loan will be based on a simplified scoring model with 60% as the minimum score for qualifying for the loan A discount of 5 % is being offered by the Supplier An extended warranty period of 18 months is also made available under this package Inspection can be at half yearly intervals

339

13

Methodology Operation of account

and the

The Company will identify and furnish application to SBI. SBI shall process the loan application and if found acceptable, the Bank will sanction the loan within 15 days and convey the sanction to the borrower and equipment supplier

Product highlights:

Our Bank is the largest financier for medical practitioners and in order to maintain and further enhance our product profile to this segment of borrowers, the Bank has entered into a tie up arrangement with M/s Confident Dental Equipment Ltd. for financing purchase of their products by medical practitioners, nursing homes, clinics, diagnostic centres, etc. The Company will identify the prospective buyers and refer them to the Bank who will consider the proposals on merits and if found acceptable, will sanction the required term loan .the proceeds of the term loan, together with the margin money component will be directly forwarded to the Company after the receipt of the equipment by the borrower within 3 days.

Marketing tips:

M/s Confident Dental Equipment Ltd. will identify the prospective buyer / borrower and it is expected that we process the applications within 15 days of receipt.

SCHOOL PLUS

25. Target Group

Primary and Higher secondary schools Graduation, Under-Graduation and Post Graduation colleges Professional colleges and coaching institutes are excluded from this product and should be assessed on usual CRA model

340

26. Eligibility

Government Aided schools / colleges Private schools /colleges Schools/ colleges run by trusts of good standing Technical institutes recognized by AICTE / NBA /MCI Institutions with a credit score of less than 4 are not eligible

27. Purpose

Purchase of land for building / play ground Construction of school building / auditorium Repair / renovation of existing building Purchase of computer and related equipment Purchase of books / manuals / software and other training material Purchase of laboratory equipment Purchase of furniture / fixtures Purchase of sports equipment Equipment for mid day meal scheme Purchase of buses for student transportation

28. Type of facilities

Term Loan

29. Quantum of Finance

No cap.

30. Margin 31. Rate of Interest

: :

15% of the project cost Ranging from 0.75% below SBAR (9.50%) to 1% above SBAR (11.25%) based on credit score

32. Security: - Primary - Collateral

Assets purchased out of Bank finance Personal guarantee of the Promoter / Trustees / any other persons acceptable to the Bank and EM of land and building and other immovable assets of the school or guarantor for 20% of the loan amount for loans of Rs.2 lacs to Rs.10lacs and EM of other immovable assets of the institute / guarantor for loans above Rs.10lacs.for 20% of the loan amount For Loans given under Banks arrangement with Intel and NIIT as service providers for schools.

Hypothecation of charge over assets acquired out of Bank finance Personal Guarantee of the key Manager / Trustees / promoters / any other persons / body acceptable to the bank. 341

PDCs to cover complete bank exposure

33. Processing fees

As applicable to C&I segment

34. Repayment

Upto Rs. 2 lacs Rs.2 lacs to Rs. 5 lacs Rs.5 lacs and above

Maximum of 36 EMI Maximum of 60 EMI Maximum of 84 EMI

Repayment to be fixed as per schedule of receipt of fees. DSCR not to exceed 2

35. Documentation

TL document for SME units Resolution of the trust Bye laws of the trust authorizing the trust to borrow from bank Guarantee Agreement of the Chief promoter(s) / Trustees/ Any other acceptable persons

36. Special features

Fixed rate Term Loan only An exclusive scoring model has been devised to assess the credit risk and fix interest rates accordingly Disbursal will be made in stages for construction Direct payment to supplier for purchase of assets No reimbursement is permissible More than one loan can be granted subject to repayment capacity as stipulated The scoring model and the application form are enclosed in the annexure section

Product Highlights:

Educational institutions are required to incur heavy capital expenditure for providing quality education to the students in comfortable and safe surroundings. As a measure to provide timely credit to such institutions subject to the repaying capacity through adequate income being available, this product has been designed by the Bank for delivery through Scale III and above incumbency branches.. The repayment schedule is also made flexible to avoid straining the liquidity of the institution.

342

Marketing Tips:

Schools which have a large student population but housed in inadequate or unsafe buildings of poor quality can be approached for availing this product. End of the school year is an appropriate time to market this product as the schools tend to take up renovation / expansion works during vacation time.

Create data base of all schools and colleges in the locality/centre.

Display product features in various vantage points in the vicinity of schools/colleges.

Marketing of this product should be taken up as a bouquet of related products and services such as Teacher Plus, salary accounts, other personal segment products such as car loans ,two wheeler loans, housing loans, etc., and services such as collection of fees, investment advisory services, etc.

FAQs

Can this product be extended to franchisees of computer training institutes?

No but such institutes can be considered under the regular CRA model or under the Mortgage Loan

343

State Bank of India ______________________ branch Application cum interview form for financing Schools

Name of the School / Institute Address of the Unit Phone No. Fax No. Email / website Address of reg. Office In case of Corporate Address of the Unit Phone No. Fax No. Email / website Other services being provided Year of commencement of business Experience in the line of activity Constitution Details of reconstitution in the past three years Premises Owned / Rented Premises Owned / Rented Premises Owned / Rented

Details of Proprietor / Partners / Directors


Name & Qualification Age PAN Residential Address Ph No / Mobile Net Worth *

344

* Opinion report on the banks prescribed format should be prepared.

Details of existing banking arrangements :

Name of the Bank / branch

Facility

Limit

Outstanding

Banking since

Details of Associate / Sister / Identical Firms :

Name of the unit

Name(s) of pro/partners

Banking with

Limit

Outstandings

Details of registration under Shops & Establishment Act / Sales tax Act / Any other Act.

Position regarding Statutory assessment under IT / Sales tax / Any other Year upto which assessment completed.

Credit facilities required

345

Fund based Cash Credit (incl. of Bill / Chq purchases) Term Loan Total

Limit required

Non fund based Letters of Credit if any, Bank guarantees, if any Total

Limit required

For term loans Details of assets to be acquired (pl. enclose detailed list if necessary)

Description

Details of the supplier

Cost

Time schedule for completion

Need for the proposed expenditure

Cost Land & Building Equipment (proforma invoice to be enclosed) Other assets Total

Amount

Means Own funds Other loans (specify source) Bank loan Total

Amount

Any other information : (Including specific reasons for Letter of Credit / Bank Guarantee / etc)

Business Information

Marketing arrangements
Level of competition Major competitors Competitive advantage of the unit

Fees details
Fee charges per month No. of Students Other income

346

Average Receivables Level

Performance Parameters Post / projects


Past three years 31.3 31.3 31.3 Sales / income Net Profit Depreciation Cash Accrual Tangible Net Worth TOL / TNW DSCR Projections 31.3 31.3

For term loans, please enclose projected profitability statements covering the period of repayment

Details of Security offered

Primary Collateral

(i)

Immovable property

Description of property

Name of the Owner

Value of the property

Basis of Valuation

(ii)

Liquid securities

Description

Name of the owner

Face Value

When Acquired

Present value

347

Details of Guarantor Where applicable


Name of the Guarantor & address Age Qualification Net worth Banking with

I/We declare that the information given in the application form are true, correct and complete and that they shall form the basis of any kind of facility State Bank of India may decide to extend to me / us. I / we shall furnish all other information that may be required by bank in connection with my application. The information may also be exchanged by you with any agency you may deem fit. You may take appropriate safe guards / action for recovery of bank dues including publication of defaulters names in website / submission to RBI. I/We confirm that I/we have no borrowing arrangements for the unit with any bank except those indicated in the application. I / We confirm that I / We are not defaulters of any Bank / any financial Institution. I / We also confirm that there are no overdues / statutory dues owed by me / us and that I / We have / had no insolvency proceedings against me / us nor have I / we ever been adjudicated insolvent. I / We undertake to abide by the Rules and Regulations of State Bank of India in respect of the facilities being extended to me / us. Signature of Borrower

Date : Place :

Name of the Interviewing Official

List of documents to be attached 1. 2. 3. Partnership deed in original (to be returned) and a copy thereof Memorandum and Articles of Association with certificate of Incorporation in original (to b returned) and copies thereof. Copies of relevant license, documents pertaining to ownership / tenancy / lease agreement in respect of premises where activity will be carried out/ service or trade related agreements etc., Latest copy of income tax return / sales tax Assessment order etc. Statement of account from the existing banker for last 6 months. Copy of the Title deeds relating to collateral security being offered. Photocopies of PAN card of partners / Directors wherever available. 348

4. 5. 6. 7.

8. 9. 10.

Copies of balance sheets for the past three years (audited wherever applicable) Statements of personal assets and liabilities of Proprietor / Partners / Directors / Guarantors. Photographs of Proprietor / partners / Directors / Guarantors.

APPRAISAL FOR FINANCING UNDER SCHOOL PLUS

For already existing schools :

1 Parameters Past record of the students (20%) Faculty (20%) Experience of promoters / trusts (20%) Security Value (20%) Existing facilities (10%) Brand name (10%)

2 Factors Average % of passing children (all classes) Quality of teachers Teachers students ratio No. of years in the industry Primary + Collateral security Science / Computer lab. Library, Arts & Crafts, Playground etc. Reputation on the School / Chain

3 Weightage 20%

4 Code (A, B, C)

5 Score 3* 4

10% 10% 20% 20% 10% 10%

Criteria for scores to be given to the factors :

Average % of passing children (all classes)

90% and above 70% - 90% Less than 70% -

A C

Quality of teachers

Post Graduate teachers i.e. M.Ed., M.Phil, Doctorate etc B.Ed teachers --------------------------------------Untrained teachers ---------------------------------------------- -

A C

349

Faculty / Student ratio

More than 30% 2 3% Less than 2% Experience of promoter / trusts

A B C

More than 5 years Less than 5 years No experience

A B

Security value (Primary + Collateral)

More than 200% of Banks exposure More than 150% of Banks exposure More than 125% of Banks exposure

A B C

Existing facilities like Science or Computer Laboratories, Libraries, Facilities for teaching crafts, arts, music, dance etc and playgrounds.

Three of more of the above facilities Two facilities -------------------------One or no such facility ---------------

A C

Reputed Chain of Schools / Very reputed name (Single School) Medium reputed school Unknown Brand or first school

A -

B C

o o o

Assign any one of the three codes (A, B & C) to all the considerations as above. The marks assigned to these codes are A = 10, B = 6 & C = 2 Calculate the total score of the risk matrix by multiplying weightage of each consideration with the marks of these codes (e.g. if a proposal gets B in past record of the students then, 20%* 6 = 1.2 mark would be given to the first consideration and accordingly the sum of all consideration will be calculated for the proposal).

350

Maximum score that can be achieved by a proposal is 10 and minimum score is 2. Interest rates to be changed based on the scores are as under :

Score received by the proposal 8 or more than 8 6 or more but less than 8% 4 or more but less than 6 Less than 4

Collateral security to be considered 0.75% below SBAR, presently 9.50% At SBAR, presently 10.25% 1% above SBAR, presently 11.25% Term Loan not to be considered

For New Schools :

1 Parameters Experience promoters / trusts (20%) Faculty (10%) Brand name (10%) Expected Demand (20%)

2 Factors No. of years in the industry Quality of teachers Reputed Chain Density of school, composition of middle, upper middle or higher income families in the area Science / Computer lab, Library, Arts & Crafts, Play ground etc. Primary + Collateral security

3 Weightage 20% 10% 10% 20%

4 Code (A, B, C)

5 Score 3* 4

Facilities (10%) Security Value (30%)

10% 30%

Criteria for scores to be given to the factors :

Quality of teachers

Post Graduate teachers B.Ed teachers Untrained teachers

A B -

Experience of promoter / trust

351

More than 5 years Less than 5 years No experience

A B

Security value (Primary + Collatral)

More than 200% of Banks exposure More than 150% of Banks exposure More than 125% of Banks exposure

A B C

Brand Name

Reputed Chain of Schools / Very reputed name (Single School) Medium reputed School ------------------------------------------------- Unknown Brand of first school --------------------------------

A B C

Expected Demand

Demand certain ------------------------Demand likely to be high ------------------High competition, demand highly uncertain

A B C

Facilities

Three of more of the above facilities Two facilities ----------------------------One or no such facility -------------------------

A B C

o o

Assign any one of the three codes (A, B & C) to all the considerations as above. The marks assigned to these codes are A = 10, B = 6 & C = 2

352

Calculated the total score of the risk matrix by multiplying weightage of each consideration with the marks of these codes.

Maximum score that can be achieved by a proposal is 10 and minimum score is 2. Interest rates to be changed based on the scores are as under :

Score received by the proposal 8 or more than 8 6 or more but less than 8% 4 or more but less than 6 Less than 4

Collateral security to be considered 0.75% below SBAR, presently 9.50% At SBAR, presently 10.25% 1% above SBAR, presently 11.25% Term Loan not to be considered

SEMFEX II

1.

Target Group

.Ex-servicemen, widows of servicemen. disable servicemen

Eligibility

Individual or association of not more than 6 members.

Purpose

To purchase utility vehicles, LCVs, Commander 650, Major(CL-500) and Savari Rang and pick ups such as single cabs and double cabs manufactured by Mahindra & Mahindra .

Type of facilities

Term Loan

Quantum of Finance

As per assessment. Not more than 10 vehicles should be owned by the borrower including the vehicles to be financed. Gross DSCR should be Minimum 1.75%

Margin

20%

353

Rate of Interest

For loans below Rs.50000/1.75% below SBAR for TLs repayable within 3 years 1.25% for TLs repayable in 3years to 7 years. For loans over Rs.50000/0.75% below SBAR for TLs repayable within 3 years 0.25% for TLs repayable in 3years and over.

Security: - Primary - Collateral

: Hypothecation charge to be registered with RTA.

Mortgage of immovable / movable property to cover 50%of the loan amount and / or third party guarantee

Processing fees

Waived

Repayment

Within 3 to 7 years with a moratorium of 6 months. Longer repayment period may be fixed based on the gross DSCR in each case.

Documentation

As per simplified SME Documentation

Special features

Subvention amount is available per vehicle for 1 year

Methodology and Operation of the account

M&M dealers will obtain applications and after due diligence will forward them to the Bank for appraisal and sanction if found acceptable in all respects.

Product highlights:

354

This scheme is for extending a soft loan to ex-servicemen to help them to augment their income in post-retirement period by undertaking a suitable economic activity. Finance can be extended for purchase of upto 10 transport vehicles of any make in utility and LCV range and cabs.. This loan can be covered under tie up arrangements of the Bank with M&M, in which case, the borrower will get the benefit of the subvention amount and two additional free service coupons.

Marketing tips: Processing fees has been waived, the repayment is extendable upto 7years. Collateral can be only upto 50% of the loan amount.

FAQs

Is there any DSCR stipulation for this product?

The minimum gross DSCR should be 1.75

Should Nabard refinance be obtained?

Only for the margin money assistance portion and not for the term loan.

355

CORPORATE LOAN

1.

Target Group

Existing C&I and SSI customers and also non customers subject to take over norms.

Eligibility

.Existing corporate and non-corporate customers in C&I and SSI segments with SB7 or SBTL7 rating. Noncustomers can also be offered this product after ensuring the creditworthiness and obtention of opinion report from their bankers.

Purpose

Repayment of high cost debt, VRS scheme, acquisition of trademarks, patents, shoring up of net working capital, etc.. Where the loan is for shoring up of NWC, then the loan amount should come down commensurate with the building up of the NWC. It should be ensured that the loan amount is not diverted for purchase of land or shares for speculative purposes.

Type of facilities

Clean Term Loan

356

Quantum of Finance

Minimum Rs.25lacs Maximum borrowers Rs.10 crores for non corporate(C&I Mfg.) / SSI

No cap for corporate borrowers 6 Margin : Not applicable

Rate of Interest

At least one step higher than the applicable rate as per the CRA rating

Security: - Primary

: First charge on assets created from bank finance or extension of first charge on current assets as the case may be. First charge on fixed assets on pari passu basis with other term lenders In case this is not possible for valid reasons, second charge on fixed assets should be obtained. 2. Personal Guarantee of promoters/partners/ proprietor should be obtained. In the case of Corporates, pledge of promoters' equity should be explored. As applicable to SSI / C&I units 1.

- Collateral

Processing fees

10

Repayment

Repayment period not to exceed 3 years at quarterly/half yearly intervals. Uneven or bullet instalments may also be permitted based on the cash flows : : As per simplified SME Documentation The discretionary powers are those applicable to term loans. A second Corporate loan may also be considered while the first loan is outstanding subject to all the earlier loans and WC advances being regular and the conduct of the accounts has been regular.

11 12

Documentation Special features

357

Product Highlights:

Corporate loans have been in vogue for sometime for corporate entities. It is a clean term loan which can be used for any specified purpose connected with the unit such as shoring up of net working capital, VRS scheme for its employees, advertisement campaign, replacing high cost debt with low cost funds and so on. The loan can be extended for a minimum amount of Rs.25 lacs to Rs.10crores for non corporates and for any amount for a corporate.

Marketing tips:

This is a useful product to attract the borrowal units of other banks to our books subject to fulfillment of takeover norms. Units which are facing liquidity crunch can be offered this loan to shore up their working capital funds. Units which are contemplating VRS scheme to reduce their wage bill are a good source for this product. Units which are about to launch a new product and require to spend on advertisement and promotion can avail this facility.

FAQs
Can improved pricing be offered to units below the applicable rate for attracting good business connections? Based on merits on a case to case basis, finer pricing can be offered after obtaining approval from the appropriate authority. Who is the appropriate authority? If the pricing is to be the same as that applicable as per CRA rating, the sanctioning authority has the discretion to approve the same. For any further improvement in pricing, the authority will depend upon the quantum of reduction sought in the rate of interest to be charged.

RENT PLUS

1.

Target Group

Owners of large commercial / office spaces rented out to large corporates, MNCs, banks, PSUs, our Bank, etc. in Metro/urban

358

areas.

Eligibility

Individuals /partnership firms/ corporates

Purpose

To meet liquidity mismatches

Type of facilities

Term Loan

Quantum of Finance

Minimum Maximum

Rs.50,000/-

Metro & urban Centres - Rs.10 crs. Subject to 60% of the gross rental income for the residual lease period less (advance rent received+ property tax + income tax + other statutory dues of the lessor) or 85% of the market value of the property whichever is less

Margin

40% (CGMs of Circles have discretion to reduce the margin to 30% For loans upto 3 years Above 3 years upto 7 years - 0.25% above SBAR - 0.50% above SBAR for the full period Above 7 years upto 10 years - 0.75% above SBAR For the full period Finer pricing as per CPPD guidelines for competitive pricing

Rate of Interest

RENT PLUS LOAN: CONCESSIONAL PRICING FOR SELECT TARGET GROUP

Target group: Landlords of SBI, our Subsidiaries & Associates and Public Sector Banks and Private sector Banks viz. HDFC Bank, Axis Bank ICICI Bank. Top MNCs can be brought under the ambit of the proposed pricing with the prior dministrative approval of the Group Head. 359

SCHEME CODE 5032 (SME/aks/ Cir/52 October 4, 2010)

Interest rate: 2.50% above the Base rate effective rate being 10% on date. The concessional pricing would be valid for all sanctions up to 31.03.2011. All other terms and conditions of the Rent Plus scheme would be applicable mutatis mutandis

Security: - Primary - Collateral First charge on property rented out or any other property of a value not less than 120% of the loan amount Personal guarantee of partners / directors In the case of public limited companies if the collateral of 120% is available, the personal guarantees of directors may be waived by the sanctioning authority In case the loan amount does not exceed Rs.25000/- and the Bank is the lessee, then EM may be waived subject to the lease deed does not expire during the currency of the loan Waiver of EM may be allowed by a sanctioning authority not less than CCC I in select deserving cases Where lessee is a reputed corporate (eg. Bank,MNC), and maintaining consistency in profitability for at least 3 years and is agreeable to execute the Tripartite Agreement AND Where lessors creditworthiness and integrity are beyond doubt and personal guarantees of all owners/partners are available. 1% of loan amount to be paid upfront presently as per CPPD circular No. CPP/JLJ/CIR/39 dated 14.08.2007 : Assignment of receivables and recording of power of attorney with the lessee is mandatory

Processing fees

10

Repayment

In equated instalments at the same frequency at which rent is received in a maximum period of 7 years or the residual lease period whichever is less.

11

Documentation

Application for loan Arrangement letter Agreement of loan and power of attorney Tripartite Agreement between the lessor, the lessee and 360

12

Special features

the Bank OR An irrevocable power of attorney from the lessor to collect the rent which should be duly registered with the lessee. Deed of Guarantee if applicable The classification of segment is based on the purpose for which the loan is being availed.

Product Highlights: This product provides finance against assignment of future rentals. The scheme is available at metro & urban centres only and is aimed at owners of residential or commercial projects which have been lease out to large or medium corporates, and Banks / MNCs. The credit is extended by way of a term loan and is repayable within the residual period of lease not exceeding 7 years Marketing tips: This product can be offered to all the owners of our Bank's rented premises both for branches as well as residential purposes. The product can also be offered to owners of other banks' branch premises as the terms and conditions of our product are much more attractive than those of other banks for a similar product.

FAQs
Can we accept some other property as collateral than that which has been rented out and the rent receivables of which are being offered as primary security?

Yes. Any property whose value is estimated to be at least 120% of the loan amount OR personal guarantee from an acceptable person(s) can be accepted as collateral . Can we extend this facility if the lessee is not an MNC/Bank/corporate?

We can give this loan in such cases on merits, subject to obtention of administrative clearance from GM (Network).

361

WORKING CAPITAL FINANCE TO PRIVATE BUILDERS OF RESIDENTIAL FLATS

1.

Target Group

Reputed builders with an excellent track record of timely and quality construction of projects undertaken and of sound financial strength.

Eligibility

Should have completed a few projects Should have a minimum net owned funds The project should have all statutory clearances The project should be completed in 18 to 24 months

3 4 5

Purpose Type of facilities Quantum of Finance

: : :

To meet working capital requirements Cash Credit The assessment will be based on the projected cash flow of the project subject to a maximum of 50% of the project cost or Rs.5 crores or 5 times his net worth, whichever is less. The reasonableness of the project cost has to be ascertained from specialised agencies. At least 50 % of the project cost

Margin

Rate of Interest

As applicable to C&I advances based on CRA rating

Security: - Primary

EM of the land. This can be waived in the case of reputed builders of good status and financial strength subject to obtention of personal guarantees of directors/ partners or corporate guarantee of associate concerns acceptable to the Bank.

Tangible collateral security to the extent feasible should be obtained from the borrower / guarantor. - Collateral

362

9 10

Processing fees Repayment

As applicable to C&I advances Within a maximum period of 36 months. If repayment period including moratorium exceeds 36 months, finance will be provided by way of Term Loan. : As per simplified SME Documentation

11

Documentation

12

Special features

All precautions relating to appraisal , sanction and documentation should be meticulously followed as this is a high risk product. It should be ensured that the credit worthiness and integrity of the major builders are reviewed and approval obtained for all their projects and also for specific projects for construction of flats. No administrative clearance is required in the case of limits granted by CCC-II and above. In all other cases, AC has to obtained from CCC-II. Refer circular CPP/RSN/CIR/10 dt. May 6, 2006.

Product highlights:

Construction activity has been witnessing exponential growth in recent years generating vast employment opportunities. The Bank has also to tap this opportunity for business by way of credit facilities, both fund based and non fund based. Construction activity is financed by way of cash credit for which the assessment is based on cash budget subject to a limit of Rs.5crores or 5 times the networth of the applicant or 50% of the project cost whichever is less.

Marketing tips:

Projects taken up by reputed companies should be got assessed in advance by specialist agencies and kept on record. As and when the application for finance is received it would be possible to consider the proposal in a short time. Otherwise, either it will take a long to time to examine all the aspects thoroughly or if the proposal is cleared in a hurry, chances are critical aspects will be overlooked in this high risk product.

We can give housing loans for flats in a building for which we have already extended credit facilities to the builder. It would be easier to process proposals

363

since the due diligence regarding the project would have already been completed. The proceeds of the housing loans will be used for extinguishing the loan to the builder.

Circular Reference

Sl.No. 1. 2. 3. 4. 5.

Subject Financing of private Builders for Residential complexes and for commercial Real Estates. Lending to Real Estate Sector Lending to commercial Real Estate Guidelines on clarification of expense on commercial Real Estate (CRE)

Circular No. CPP/RSN/CIR/10 dt. 6/05/06 CPP/RSN/CIR/57 dt. 10/10/06 CPP/RSN/CIR/25 dt. 20/06/07 CPP/DMR/CIR/58 dt. 8/10/09 CPP/DMR/CIR/53 dt. 22/9/09

LOANS FROM FCNR(B) FUNDS


1. Salient features of the scheme are as follows: a) Loans can be granted for manufacturing as well as trading activities of units rated SB 10 and above. Exporters and Industries/Hotels with matching forex inflows will be preferred. b) Loans can be granted for working capital as well as Term Loan requirements by way of FCNR(B) DLs and FCNR(B) TLs. FCNR(B) Demand loans can be sanctioned for a maximum period of 12 months. FCNR(B) Term Loans can be sanctioned for a duration of 1 to 5 years. Whenever Term loans are considered for a period of above 3 years a specific prior clearance needs to be obtained from FD. Sanctioned for a period of above 3 years, Bank will retain the option to convert the loan in to Rupee loan at any time after 3 years from the date of sanction. Fresh loans above 12 months (FCNRB-TL) to be discouraged. All existing loans will continue to be repriced will revised spreads at the end of 2 years after the 364

disbursement of loans, as per the instructions contained in circular no. CCO/CPPD/TL/102/2008-09. Term loans would continue to be rolled over at the end of 12 months to the extent possible for the residual tenor of the loan, with the prevailing pricing and margin, at the time of roll-over. c) Loans will be granted in US Dollars , Pound Sterling, Euro and Yen if funds are available Minimum: US Dollars 50000 or equivalent in other currencies and in multiples of USD/GBP/EUR 10,000 and JPY 1,000,000 thereafter.

Maximum: US Dollars 5 million per borrower in general for working capital and term loan put together. After that approval of Dy MD (IBG) will be required.
d) Prior funds clearance should be obtained from FD before commitment to borrowers. In no case sanction of FCNR(B) loans should be communicated to the borrower before funds allocation clearance is obtained from FD Kolkata.

e) Rate of interest: Base rate is 6 mth LIBOR/Euribor for loans upto 6 months and matching period LIBOR/Euribor for loans beyond 6 months. The interest rate would be re-fixed every 6 months from date of first disbursement based on prevailing LIBOR on material dates. The policy for reset of interest rates applicable to other TLs will be applicable mutatis mutandis to FCNB TLs also. The base rate and the spread over it range according to the credit rating of the unit. FCNR (B) DL (For period up to 12 Months)

Credit Rating (New CRA model) SB 1(SB-1,SB-2) SB2(SB-3 to SB-5) SB-3(SB-6,SB-7) SB-4(SB-8,SB-9) SB-5(SB-10)

PRICING Libor + 4.25% Libor + 5.00% Libor + 5.50% Libor + 6.50% Libor + 7.00%

THERE SHALL BE NO SEPARATE PRICING FOR EXPORTERS IN LIEU OF PRESHIPMENT / POST-SHIPMENT FINANCE. LIBOR SHALL BE 6 MONTH LIBOR FOR LOANS FOR & UPTO 6 MONTHS AND MATCHING PERIOD LIBOR FOR LOANS OF MORE THAN 6 MONTHS DURATION.

FCNR (B) TL 365

PERIOD OF Credit Rating (new CRA model) LOAN Upto 12 Months SB1(SB-1,SB-2) SB2(SB-3 to SB-5) SB-3(SB-6,SB-7) SB-4(SB-8,SB-9) SB-5(SB-10) Above 12 Months

Pricing

Libor+ 4.50% Libor + 5.25% Libor + 5.75% Libor + 6.50% Libor + 7.25%

FRESH LOAN IN THIS TIME BUCKET TO BE DISCOURAGED. EXISTING LONG TERM LOANS WILL BE CONSIDERED UNDER THE TWELVE MONTHS BUCKET

f) Withholding Tax-nil g) Processing Fee- for FCNR(B) DLs -there is no separate processing fee if it is already recovered at the time of fixing the overall limit. For FCNR(B) TLs processing fee applicable to the equivalent to the Rupee term loan should be recovered. h) Transaction Cost-Upfront Rs.25,000/- for each FCNR(B) DL Rs.35,000/- for each FCNR(B) TL to be credited to Branch Commission A/C. i) Commitment Charge- ( for both DLs and TLs) For disbursement,time allowed without committment charge is 15 days from the date of allocation of funds. In case disbursement is not availed within 15 days from the date of Funds Angle clearance (FAC) the same will be automatically cancelled. The request of FAC for the same customer under the said facility, can be made only after 45 days of the original FAC issuance date. However, customer can make a request for fresh FAC before 45 days of FAC issuance date provided he pays a charge of 1% p.a. from the date of issuance of lapsed FAC. j) Transfer Price Mechanism: 80% of the interest recovered will have to be given as Central Office interest irrespective of business segment. k) Branches to revalue the balances half-yearly at rates advised by FD. l) Penalty for early payment (Minimum lock-in period of 3 months)

366

For early repayment of the loan, a penalty at 1.5% per annum on the amount of the loan prepaid,for the unexpired period of the loan is charged. m) For repayment of FCNR(B) loans, Authorised Dealers can sell foreign currency to borrowers without RBI permission. These loans can also be repaid by adjustment of advances/inward remittances/export proceeds/balances in EEFC accounts/other forex inflows. In the event of no funds being available in the borrowers account, an overdraft/irregularity is to be created for remitting the FCNRB (DL) / instalments of FCNRB(TL) on due date to FD. Kolkata. n) The scheme is operated at designated branches(DBs). Other branches can operate the scheme through DBs. o) If customers wish to book forward sale contracts for their interest liability they may be permitted to do so by giving these contracts separate treatment and these contracts once booked will not be allowed to be cancelled before delivery date. p) A sensitivity analysis is to be carried out considering the possibility of a fluctuation in rupees to an extent of 10% if hedging is waived. q) FCNRB Loans (DL & TL) should not be used to PCFC loans.

2. FCNR(B) DEMAND LOANS

a) b)

Period: Up to a period of twelve months. Within the Rupee MPBF fixed for the borrower and the Fund Based Working Capital sanctioned by the Bank. It can be part of either working capital demand loan or cash credit component. If Rupee WCDL has been converted to FCNR(B) DL then maturity of the FCNR(B) DL will be same as that of Rupee WCDL. Availment of FCNR(B) DL for broken period is also permitted

c)

d) e)

Disbursed in one lump sum, so also the repayment. Loans can be granted on fully hedged basis. Waiver for booking of Forward cover can be approved by the Credit sanctioning authority not below the rank of CCC-1, if the corporate has natural hedge or well laid out corporate hedging policy. However, wherever waiver is permitted, Bank reserves the right to insist on hedging any time during the currency of the loan based on period reviews undertaken or whenever major adverse movement in exchange rates take place. FCNR(B) DL can be utilised to prepay the WCDL, with the approval of the controlling authority.

f)

367

g)

The number of WCDL and FCNR(B) DLs put together should not exceed seven per borrower. For exporters, FCNR(B) DL in lieu of EPC (carved out of EPC limits) can be sanctioned. Such credits to exporters would amount to export credit. Adjustment of advance/inward remittances/export proceeds, balances in EEFC/EFCA a/cs etc. can be made in FCNR(B) DL.

h)

i)

Revaluation of outstandings should be made at the beginning of each month to assess whether the Rupee liability is within the capacity of the borrower. If not FCNR(B) DLs should be converted into WCDL under advice to controllers. Interest should be recovered for FCNR(B) DLs at monthly intervals at the ruling TT Selling rate for the Foreign Currency amount.If the interest amount is Rs.10 lakhs and above finer rates can be applied.

j)

k) FCNRB (DL) in excess of 50% of fund based working capital limit may be freely allowed if done on fully hedged basis. In other cases, permission to be obtained from CGM.

SME Construction Equipment Loan (SCEL)

1.

Target Group

Contractors, Firms, firms engaged in construction activity

Product Code 2 Eligibility :

6241-1073
Firms/ Companies (including Contractors) engaged in construction activity with a minimum rating of SB-8 (new)

Purpose

Line of Credit for financing New Machinery/ Equipments/ Vehicles for construction activities. Borrowers engaged in mining activities can also be financed under the scheme. As a corollary, the borrowers engaged in mining activities can now be financed under our other company specific
368

construction equipment loan schemes viz. Tie up with JCB, Telecon, Volvo, Escorts etc 4 Type of facilities : Term Loan

Quantum of Finance

Minimum Rs 25.00 lac Maximum Rs 25.00 Cr. (In Delhi, Kolkata, Chennai, Mumbai, Hyderabad and Bangalore maximum limit is Rs 50.00 Cr)

Margin

15% - 20% in case of SB1 SB2 borrowers. 20 25% for others

Rate of Interest

For SB1 & SB2 borrowers: 1.50% below SBAR For others : 1.25% below SBAR

No further concession would be considered. 8 Security: - Primary : 1.Hypothecation of machinery/ equipment / vehicles financed by the Bank. 2. Registration Charge with RTA 3. Pre payment cheques for principal amount, favouring SBI a/c CEL.(Name of borrower) - Collateral Hypothecation of other unencumbered equipment or EM of property to the extent of at least 25% of the loan amount 9 Processing fees For SB1, 2 borrowers Rs.200 per Rs.1 lac loan amount For other borrowers Rs.300 per Rs.1 lac loan amount Sanctioning authority has discretion to reduce upto 50% Documentation Charges: For SB1 SB2 borrowers Rs.5000/For others - Rs.10000/-

369

10

Tenure

2 to 3 years from first disbursement (including moratorium period of maximum 3 months). Tenure can be extended upto 4 years on merits of the case

11

Repayment

In EMIs Variable repayment program based on cash flow of the company can also be considered if the borrower so desires.

12

Documentation

As per simplified SME Documentation

13

Disbursement

The loan may be disbursed in several tranches within a period of maximum one year from the date of Sanction depending on requirement of the borrower for purchase of equipments/ machinery/ vehicles within one year. One tranche should not be less than 10% of the amount of loan. Payment to be made direct to suppliers.

14

Processing Charges/ upfront fee

50% concession in the prescribed charges

15

Documentation Charges

50% of the prescribed charges

16.

Pre Payment Charges

2% of the amount prepaid

17.

Penal interest

For SB 1 to SB-5 borrowers: @ 1.00% per month for the default amount. For other borrowers: @ 2.00% per month for the default amount On business considerations sanctioning authority may approve concession upto 50% Half Yearly. Sanctioning Authority may waive it in suitable cases based on the customer credentials as also when the equipment is spread over various construction sites.

18.

Inspection

370

Comprehensive insurance policy with endorsement in favour of SBI as loss payee 19. 20. 21 Insurance Review Applicability Annually

The scheme will be available to all branches for financing SIB/C&I customers which are not being catered to by MCG/ CAG

Sl. No. : 697/2009 - 10 Circular No. : NBG/SMEBU-CONSTEQUIP/62/2009-10 Saturday, January 16,2010.

CONSTRUCTION EQUIPMENT LOAN JCB MACHINES

Eligibility

Those engaged in construction activity

371

Purchase of equipment manufactured by JCB 2. Purpose Minimum Rs.15 lacs 3. Quantum Maximum : Rs.100 lacs

25% for borrowers who are new to this line of business 4. Margin 15% in case of borrowers having 9 machines 5% in case of borrowers having more than 9 machines

5.

Repayment

Upto 4 years including a moratorium of upto 3 months

6.

Interest

For SB1 to SB5 (new rating); at SBAR For SB6 to SB9 (new rating) : 0.50% above SBAR For borrowers not subjected to CRA rating: 0.50% above SBAR Those with CRA rating below SB9 should not be financed.

7.

Penal interest

2% for the amount and period in default

Note : All other terms and charges as per card rates. This scheme is valid 31.03.2010

TIE UP WITH ZEE INTERACTIVE LEARNING SYSTEMS(ZILS) FINANCING OF PRIMARY AND SECONDARY SCHOOLS

372

14. Name of the scheme 15. Type of Loan 3. Eligibility

: : :

KIDZEE Term Loan Have signed franchisee agreement with ZILS which is the Education Division of ETC Networks Limited. Term Loan for Initial Investment for - Payment of Franchisee fees - Purchase of education and office equipment - Interior Decoration - Construction of Building Term Loan to pay Operating Costs for first six months after commencement of school to be disbursed every month for - Personnel Cost - Administrative Cost - Marketing Cost

4.

Purpose

5.

Quantum of Finance

For initial investment Rented Premises: upto 75% of the investment (excluding land) up to maximum of Rs 1 crore Owned Premises where construction is required: upto 75% of the investment up to maximum of Rs 5 crore For operating costs for first six months upto 75% of Operating cost up to maximum of Rs 5 Lacs per month.

Security

Primary Hypothecation of assets created by the loan Collateral Tangible Security at 100% of exposure of SBI to franchisee, in the form of property, deposits, shares etc. May be relaxed to 50% by DGM (O&C).

Margin

25% of initial investment and projected operating costs for first six months Repayments in maximum 48 monthly installments.

Repayments

373

Moratorium period of maximum 12 months from Commencement of classes as required. Classes to commence maximum within 1 year after franchisee Agreement. 9 Rate of Interest :
Where the collateral is 100% of loan value: 0.50% above SBAR (reduced by 50 bps) Where the collateral is 50% of loan value: 1.25% above SBAR (reduced by 25 bps)

10

Other Features

Quantum of Initial Investment and Operating Cost will be advised to Bank by ZILS as per standard ZEE Business plan, based on which financing will be done. Financing to be done against 100% tangible collateral security.

Sl. No. : 376/2009 - 10 Circular No. : NBG/SMEBU-KIDZEETIE/35/2009 - 10

Construction Equipment Loan (CEL) JCB India Name of the Product Construction Equipment Loan (CEL) JCB India Term loan for purchase of construction equipments viz. loaders, excavators, cranes etc manufactured by JCB Individuals/ Firms/ Companies engaged in construction work Minimum Rs 15 lac Maximum Rs 100 lac Up to 4 years (including moratorium of up to 3 months). 25% in case of borrowers who are new to this line i.e. buying their first loader/ machinery etc. 15% in case of buyers having up to 9 machines 5% in case of buyers already having more than 9 machines Advance under the scheme would also be subject to the Banks instructions regarding credit rating in general advances. The interest is linked to
374

Nature/ Purpose

Eligibility Amount Tenure Margin

Interest

Primary Security

rating as under: (i) For SB 1 to SB 5 (new rating) borrowers: at par with SBAR (ii) For SB 6 to SB 9 (new rating) borrowers: 50 bps above SBAR (iii) For borrowers which are not subject to rating (presently advances below Rs 25.00 lac) : 50 bps above SBAR Advance is not to be sanctioned where rating is below SB 9 (i) Hypothecation of the Equipment (s) financed from the Bank Loan. In case of Vehicles, registration of charge with RTO is to be ensured. (ii) Standing instructions to debit the borrowers SB/CD account with the loan installments in case of account being with us. In case of account being with other bank post-dated Cheques for 24 monthly installments. However, in both the cases at least 3 undated Cheques should be obtained and held on record with loan documents till the account is closed. However, the borrower should be encouraged to deposit the installments in cash - right from the beginning. 1. All eligible advances to be covered under the collateral free CGTMSE Scheme. However, fee will be recovered from the borrower. 2. In case an advance can not be covered under CGTMSE - hypothecation of other unencumbered equipments or mortgage of property to the extent of at least 25% of the loan amount is to be obtained. As applicable to Term Loans Payment to be made direct to suppliers/ dealers. In EMIs 2% for the amount and period in default Half yearly. However, in case of account giving warning signals, the frequency should be increased as may be warranted Comprehensive Insurance policy with endorsement in favor of SBI on the policy as loss
375

Collateral securities

Assessment Disbursement Repayment Penal Interest Inspection

Insurance

payee Comprehensive Insurance policy with endorsement in favor of SBI on the policy as loss payee All other terms and conditions regarding assessment, conduct and supervision etc would be applicable like in other advances The scheme will remain valid upto 31.03.2011
NBG/SMEBUCONSTEQUIP/ 80/2009 10, March 04,2010.

Tie up with JCB India to finance construction equipments being manufactured by them (i) JCB Tie up (SBF) 6221-1075 (ii) JCB Tie up (C&I) 6241-1075

SUPPLY CHAIN FINANCE-ELECTRONIC DEALER FINANCING SCHEME (E-DFS) TIE-UP WITH IOCL FOR FINANCING THEIR DEL CREDERE AGENTS (DCAs) AND CONSIGNMENT STOCKISTS (CS) FOR THE POLYMER BUSINESS PURPOSE IOCL is entering into polymer business through their newly commissioned Naptha Cracker plant at Panipat, Haryana. IOCL proposes to sell the polymer products to its large customers directly but for medium and small customers they propose to appoint Del Credere Agents (DCAs) and Consignment Stockists (CS). The operational flow for DCA and CS is as follows Del Credere Agent (DCA) Consignment Stockist (CS)

DCA will be appointed by IOCL for large and medium size customers.

CS will be appointed by IOCL for small size customers.

Customers will be identified and registered with IOCL on online platform. DCA will help in this process

Customers will be identified and registered with IOCL on online platform. CS will help in this process.

Customer will raise the indent either through DCA or will himself login at IOCL website and place the

CS will maintain warehouse on behalf of IOCL. Goods in the warehouse will be of IOCL.

Indent will be verified by DCA as well as by local Regional Manager of IOCL. Customer will raise indent on CS and after verifying position of goods, CS will inform field officer of IOCL. Field officer will release the indent and invoice will be

376

IOCL will raise invoice on the customer and transport the goods directly to the customer

Within the credit period, allowed by IOCL, the customer pays to Company, failing which, IOCL recovers money from DCA on the next day of the expiry of credit

IOCL gets money and CS makes repayment to the Bank as per the terms of credit extended to him by

IOCL uses our Internet Banking system to upload the details of invoices and raise a debit request on DCA Account IOCL gets money and DCA makes repayment to our Bank as per the terms of credit.

The details of the tie-up are as follows: Proposed terms and conditions for Financing IOCLs Consignment Stockist (CS) Purpose Facility Required To provide finance to the Consignment Stockist of IOCL for the sales made to their customers. Fund Based Cash Credit Limits. Disbursement on invoice by invoice basis through electronic Dealer Finance Scheme platform (e-DFS). Non Fund Based Bank Guarantee limits (BGs will be issued in favour of IOCL.)
377

Amount of finance Eligibility Criteria

Margin Disbursement

Usance Grace Period Limit assessment

Minimum of Rs. 1 Cr (Fund based + Non Fund Based) and maximum of Rs. 50.00 Cr. The facility shall be extended to the CS appointed and recommended by IOCL. Details will be made available at: SBI Times>Departments>SME BU>SCFU CC: NIL Bank Guarantee: 10% (Cash Margin) Disbursement of CC limits through newly developed e-DFS. 100% financing to CS against invoices raised on the customers. Debits in the CS account will be raised by IOCL directly. Maximum upto 45 days including grace period extended by IOCL to the CS. NIL Limits to be assessed on the basis of projected monthly sales as provided by IOCL or CS. The limits will be equal to the projected monthly sales apportioned to the usance period. Primary Hypothecation of receivables for which invoices have been raised on the customers. Collateral (For total FB + NFB): Minimum 25% of tangible collateral standing in the name of CS. (In case the collateral is owned by a third party the guarantee of the owner has to be obtained.) Personal Guarantee of all the directors/promoters of CS. 1) IOCL will identify and recommend the CS for Dealer financing along with the projected purchases. 2) IOCL will stop supplies through CS in the event of default by CS. 3) IOCL will help the Bank in recovering the overdue on the best possible efforts basis. 4) IOCL will transfer all the funds and dues to the CS to the Bank in the event of default. Interest rate will be linked with SBAR (Currently @ 11.75%) depending on the amount of tangible collateral offered by the CS Tangible Interest Rates Collateral 25% 12.75% (SBAR +1.00%) 50% 12.25% (SBAR +0.50%) 75% & 11.75% (SBAR). above

Security

Comforts from IOCL

Interest rate

378

Penal Interest

Documentation

Charges

Other Conditions Repayment Inspection Validity of sanction

Penal rate of 3% will be applicable over and above the contracted rate for all overdue invoices till the date of payment. With IOCL: MOU/Agreement for accepting the various terms and conditions of the facility. Letter of Recommendation mentioning the details of the CS. With CS: All the standard SME documents which are currently being taken by the branches for normal dealer finance tie-up. A separate agreement mentioning the terms & conditions of the arrangement Loan processing charges, inspection charges and EM charges are to be levied 50% of the normal card rates. Bank guarantee charges also to be levied 50% of the normal card rates. CS has to provide four pre - signed cheques in the name of the concerned SBI Branch. Repayment will be made though e-DFS platform and will be done invoice wise by CS. Monthly. 1 year.

Terms and Conditions for Financing IOCLs Del Credere Agents (DCA) Purpose Facility Required To provide finance to the Del Credere Agents of IOCL for the sales made to their customers. Fund Based Cash Credit Limits. Disbursement on invoice by invoice basis through e-DFS platform. Non Fund Based Bank Guarantee issued in favour of IOCL. Minimum of Rs. 1 Cr (Fund based + Non Fund Based) and maximum of Rs. 50.00 Cr. The facility shall be extended to the DCAs appointed and recommended by IOCL. Details will be made available at: SBI Times>Departments>SME BU>SCFU CC: NIL Bank Guarantee: 10% Disbursement of CC limits through newly developed eDFS. 100% financing to DCA against invoices raised on the customers. Debits in the DCA account will be raised by IOCL
379

Amount of finance Eligibility Criteria

Margin Disbursement

Usance Grace Period Limit assessment

directly. Maximum upto 45 days including the grace period offered by IOCL to the DCA. Nil Limits to be assessed on the basis of projected monthly sales as provided by IOCL or DCA. The limits will be equal to the projected monthly sales apportioned to the usance period. Primary Hypothecation of receivables for which invoices have been raised on the customers. Collateral (For total FB + NFB): Minimum 25% of tangible collateral standing in the name of DCA. (In case the collateral is owned by a third party the guarantee of the owner has to be obtained.) Personal Guarantee of all the directors/promoters of DCA. 1) IOCL will identify and recommend the DCA for dealer financing along with projected purchases. 2) IOCL will stop supplies through the DCA in the event of default by the DCA. 3) IOCL will help the Bank in recovering the overdues on the best possible efforts basis. 4) IOCL will transfer all the funds and dues to the DCA to the Bank in the event of default by the DCA. Interest rate will be linked with SBAR (Currently @ 11.75%) depending on the amount of tangible collateral offered by the CS Tangible Interest Rates Collateral 25% 12.75% (SBAR +1.00%) 50% 12.25% (SBAR +0.50%) 75% & 11.75% (SBAR). above Penal rate of 3% will be applicable over and above the contractual rate for all overdue invoices till the date of payment With IOCL: MOU/Agreement for accepting the various terms and conditions of the facility. Letter of Recommendation mentioning the details of the dealers as well as their monthly purchases from IOCL for the last two years. With DCA: All the standard SME documents which are currently being taken by the branches for normal dealer finance tie-up. A separate agreement mentioning the terms &
380

Security

Comforts from IOCL

Interest rate

Penal Interest

Documentation

Charges

Other Conditions Repayment Inspection Validity of sanction

conditions of the arrangement Loan processing charges, inspection charges and EM charges are to be levied 50% of the normal card rates. Bank guarantee charges also to be levied 50% of the normal card rates. DCA has to provide four pre signed cheques in the name of concerned SBI Branch. Repayment will be made though e-DFS platform and will be done invoice wise by DCA. As per extant instructions. 1 year.

INVENTORY FUNDING TO DEALERS OF MARUTI UDYOG LIMITED SCHEME CODE: 9075

Purpose Nature of Facilities Eligible amount of finance Eligible customers Repayment Rate of Interest

To provide assistance to dealers of Maruti Udyog under the tie up arrangement for financing of vehicles. Cash Credit Upto 100% of 60 days of working capital requirements for Stocks of vehicles. Corporate/ Non-corporate/ Individuals having franchisee appointment letter from Maruti. Repayable within 60 days of disbursed (batch-to-batch basis), renewal every year As per credit scoring matrix For loan above Rs.25 lacs: CRA Rating Rate of Interest (Base Rate = 7.50%p.a.) SB1 to SB2 3.25% above Base Rate (10.75% p.a.) SB3 to SB5 3.75% above Base Rate (11.25% p.a.) SB6 & SB7 4.25% above Base Rate (11.75% p.a.) SB8 to SB9 4.75% above Base Rate (12.25% p.a.) * No finance below SB9. a) Primary: Hypothecation of stocks/ other assets of the dealer. b) Collateral Security: Personal guarantee of promoters (mandatory)
381

Security

Inspection Inspection Charges

Primary security + tangible collateral security should be 125% of the loan amount Bi-monthly 50% concession on the following card rates: Up to Rs.25000/- - Nil Above Rs.25000/- but up to Rs.2 lacs - Rs.500/- p.a. Above Rs.2 lacs but up to Rs.5 cr. - Rs.500/- per lac p.a. for inspection within same municipal limits with a maximum of Rs.12000/- p.a. For outstation inspection actual charges + 25% subject to the minimum of Rs.12000/-p.a. Above Rs.5 cr. - Actuals + 25%, subject to the minimum of Rs.12000/- p.a. The assets created out of Banks finance are to be insured for full market value, against all risks 50% concession on the following card rates. Up to Rs.25000/- - Nil Above Rs.25000/- but up to Rs.2 lacs - Rs.500/Above Rs.2 lacs but up to Rs.1 cr. - Rs.500/- per lac Above Rs.1 cr. - Rs.400/- per lac Minimum Rs.50000/- Maximum Rs.20 lacs

Insurance Processing Fees

COMMODITY BACKED WAREHOUSE RECEIPT FINANCING

Purpose

Eligibility

To finance traders/ owners of goods/ manufacturers for own processing against warehouse receipts of warehouses managed by MCX/NBHC, NCDEX(NSMSL) and CWC/SWC by way of working capital demand loan. Any one dealing in commodities. *CC facility will only be offered for limits of Rs 1 crore and above
Demand Loan: 75 % of the value of the warehouse receipt, valued at the market value OR 80% of the minimum support price declared by State/Central Government, whichever is lower Cash Credit: 70 % of the value of the warehouse receipt, valued at the market value OR 75% of the minimum support price declared by State/Central Government, whichever is lower Assessment of limit for manufacturing units under Commodity backed WHR should be assessed under Assessed Bank Finance (ABF) and interchange of limit in
382

Eligible amount of Finance

Assessment

Interest Rates (in Percentage

between CC Hypothecation & WCDL against Warehouse receipt may be permitted. It should also be ensured that the projected stock level within the ABF does not exceed the quota of storage fixed by the respective Central/ State Government, if any, for the unit under finance. Loan category Interest Rate to be Charged Upto Rs. 10 Lacs Above Rs. 10 Lacs 0.50% Below SBAR Effectively 12.25%

Processing charges

0.25% Below SBAR Effectively 12.50 % Cash Credit: 0.25% Above SBAR; min rate 13.00% In addition to the above-mentioned Interest rates the ZCC will have powers to reduce the interest rates on demand loans in the Rs. 10 lacs and upto Rs. 25 lacs category by 25 bps and demand loans in the above 25 Lacs category and cash credit facility by 50 bps, based on competition and strength of proposal. SME/RC/Cir-33/20010-11 July 28, 2010 Tenure of Loan Rate of Interest Upto 6 Months @ 2.50% above Base Rate effective10.00% p.a. Above 6 Months and @ 3.00% above Base Rate upto 1 Year effective 10.50% p.a. Cash Credit: Rs.300/- per lac for the facility sanctioned Demand Loan: Nil where loan is sanctioned and disbursed Rs. 300 per lac in case the loan is sanctioned but the borrower does not avail.
Demand Loan: 25% (minimum) of the value of the warehouse receipt, valued at the market value OR 20% (minimum) of the minimum support price declared by State/Central Government, whichever is higher. Cash Credit: 30% (minimum) of the value of the warehouse receipt, valued at the market value OR 25% (minimum) of the minimum support price declared by State/Central Government, whichever is higher Comprehensive Insurance Insurance cost to be borne by the warehouse receipt owner.

Margin

Insurance

Security a) Primary b) Collateral Repayment


Charge over warehouse receipt (resulting in charge over underlying goods), with lien marked in favour of the bank Personal guarantee of partners or directors as the case may be. Demand Loan: The loan should be liquidated as and when the produce is sold during the interim period not
383

Moratorium

Other terms and conditions

Product Codes

exceeding 12 months. Cash Credit: Repayable on demand. To be brought to credit balance and DP made Nil/reduced when the quality certificate expires. None. The loan would be repayable in a maximum period of twelve months. Interest as and when due would be payable. a) The Warehouse receipt should be duly marked lien in favour of the bank. b) The Branch should verify the authenticity of the warehouse receipt and get its lien noted with the warehouse before disbursal of the demand loan/ CC facility. c) For individual warehouse receipts of value over Rs 50 lacs and for limits over Rs 1 crore, the Branch should inspect the underlying commodity every three months at irregular intervals, within the validity of the quality certification. For smaller limits, periodical inspection of the commodity is waived. If, however, the conduct of the account is not satisfactory, such accounts require inspection by branch staff at monthly/quarterly intervals, as specified for similar advances. d) The margin shall be topped up on a fortnightly basis. However, it should be topped up immediately in case the price of commodity moves by more than 10%, in opposite direction, since last top up. e) CC Limits and operating account will be different for different commodities handled by the same trader/customer. Inter-changeability in limits can be offered, if required. Product Description Segment Product Code BR-WHR FINANCE CC SSI 6114-5301 SSI BR-WHR FINANCE CC SBF 6124-5301 SBF BR-WHR FINANCE CC C&I 6144-5301 C&I

STATE BANK OF INDIA

384

Know Your Customer, Anti Money Laundering and Combating Financial Terrorism Policy
Board approved Policy to be read in conjunction with the Operating Guidelines

Banking Operations Department National Banking Group Corporate Centre

Mumbai

For Internal Circulation only

The document is the approved Policy of State Bank of India in regard to Know Your Customer Standards to be followed and measures to be taken in regard to Anti Money Laundering and Combating Financial Terrorism. The document is current as on ________ and incorporates the statutory and regulatory guidelines issued in this regard upto the 1st July, 2008. This circular can also be viewed and downloaded from SBI Times, Banks intranet site from the link Policies. 385

Policy on Know Your Customer Standards, Anti Money Laundering and Combating Financial Terrorism Measures INDEX Pg.Nos.

1. 2. 3. 4. 5. 6. 7.

Preamble Objective, Scope & Application Definition of Money Laundering Obligations under Prevention of Money Laundering Act, 2002 Money Laundering Risk Perception Definition of a Customer Key Elements of the Policy 7.1 7.2 7.3 7.4 7.5 7.6 Customer Acceptance Policy Customer Identification Procedures Small Deposit Accounts Monitoring & Reporting of Transactions Closure of Accounts Risk Management

3 3 4 5 5 5 6 6 7 8 9 10 10 11 11 11 12 12 12 12 13 13 13

8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Employee Training Recruitment/Hiring of Employees Customer Education Introduction of New Technologies KYC for the existing accounts Branches and subsidiaries outside India Correspondent Banking Miscellaneous Principal Officer Review of the Policy

386

Policy on Know Your Customer Standards and Anti Money Laundering/Combating Financial Terrorism Measures

1.

Preamble Reserve Bank of India has been issuing guidelines in regard to Know Your Customer (KYC) standards to be followed by banks and measures to be taken in regard to Anti Money Laundering (AML) and Combating Financial Terrorism (CFT). The guidelines incorporate the: obligations cast on banks under the Prevention of Money Laundering Act (PMLA), 2002 recommendations made by the Financial Action Task Force (FATF) on AML standards and CFT paper issued on Customer Due Diligence (CDD) for banks by the Basel Committee on Banking Supervision Banks are required to put in place a comprehensive policy framework, duly approved by the Board of Directors, in this regard. This policy document has been prepared in line with the RBI guidelines and incorporates the Banks approach to KYC, AML and CFT issues.

2.

Objective, Scope and Application of the Policy: The primary objective of the Policy is to prevent the Bank from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist financing activities. Purposes proposed to be served by the Policy are: (i) To prevent criminal elements from using the Bank for money laundering activities (ii) To enable the Bank to know/understand the customers and their financial dealings better which, in turn, would help the Bank to manage risks prudently (iii) To put in place appropriate controls for detection and reporting of suspicious activities in accordance with applicable laws/laid down procedures. (iv) To comply with applicable laws and regulatory guidelines.
387

(v)

To ensure that the concerned staff are adequately trained in KYC/AML/CFT procedures.

This Policy is applicable to all domestic branches/offices of the Bank and is to be read in conjunction with related operational guidelines issued from time to time.

It shall also apply to the branches and majority owned subsidiaries of the Bank located in countries which do not or insufficiently apply the FATF recommendations, to the extent local laws permit. When local applicable laws and regulations prohibit implementation of these guidelines, the same should be brought to the notice of RBI. In case there is a variance in KYC/AML standards prescribed by RBI and the host country regulators, braches abroad/overseas subsidiaries will be required to adopt the more stringent regulation of the two.

3.

Definition of Money Laundering Section 3 of PMLA has defined the offence of money laundering as under: Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering.

Money launderers use the banking system for cleansing dirty money obtained from criminal activities with the objective of hiding/disguising its source. The process of money laundering involves creating a web of financial transactions so as to hide the origin and true nature of these funds.

For the purpose of this document, the term money laundering would also cover financial transactions where the end use of funds goes for terrorist financing irrespective of the source of the funds.

4. Obligations under Prevention of Money Laundering (PML) Act 2002

388

Section 12 of PMLA places certain obligations on every banking company, financial institution and intermediary, which include

maintaining a record of prescribed transactions furnishing information of prescribed transactions to the specified authority (iii) verifying and maintaining records of the identity of its clients (iv) preserving records in respect of (i), (ii) and (iii) above for a period of ten years from the date of cessation of transactions with the clients.

(i) (ii)

These requirements have come into effect from the 1st July, 2005 i.e. the date on which PMLA was notified by the Government of India and rules framed there under.

5.

Risk Perception

Non compliance with KYC standards, use of the portals of the Bank for Money Laundering/financing terrorism activities expose the Bank to various risks, such as Operational Risk, Reputation Risk, Compliance Risk and Legal Risk etc. . 6. Definition of a Customer A customer, for the purpose of the Policy is defined as: (i) a person or an entity that maintains an account and/or has a business relationship with the Bank (ii) (iii) one on whose behalf the account is maintained (i.e. the beneficial owner) beneficiaries of transactions conducted by professional intermediaries, such as Stock Brokers, Chartered Accountants, Solicitors etc. as permitted under the law, and (iv) any person or entity connected with a financial transaction.

389

7.

Key Elements of the KYC Policy The KYC Policy of the Bank has the following key elements: Customer Acceptance Policy Customer Identification Procedures Monitoring of Transactions and Risk Management

While the Policy directions are given in this document, the detailed operating guidelines are being issued separately which should be referred to for effective implementation of the Policy.

7.1

Customer Acceptance Policy Banks Customer Acceptance policy (CAP) lays down the criteria for acceptance of customers. The guidelines in respect of the customer relationship in the Bank broadly are: (i) No account is to be opened in anonymous or fictitious/benami

name(s)/entity(ies) (ii) accept customers only after verifying their identity, as laid down in Customer Identification Procedures (discussed later) (iii) classify customers into various risk categories and, based on risk perception, apply the acceptance criteria for each category of customers. Also, a profile of each customer will be prepared based on risk categorisation (iv) Documentation requirements and other information to be collected, as per PMLA and RBI guidelines/instructions, to be complied with (v) Not to open an account or close an existing account (except as provided in paragraph 7.5 of this Policy), where identity of the account holder cannot be verified and/or documents/information required could not be

obtained/confirmed due to non-cooperation of the customer (vi) Identity of a new customer to be checked so as to ensure that it does not match with any person with known criminal background or banned entities such as individual terrorists or terrorist organizations etc. (vii) Implementation of CAP should not become too restrictive and result in denial of banking services to general public, especially those who are financially or socially disadvantaged.

390

7.2

Customer Identification Procedures Customer identification requires identifying the customer and verifying his/her identity by using reliable, independent source documents, data or information. Thus, the first requirement of Customer Identification Procedures (CIP) is to be satisfied that a prospective customer is actually who he/she claims to be. The second requirement of CIP is to ensure that sufficient information is obtained on the identity and the purpose of the intended nature of the banking relationship. This would enable risk profiling of the customer and also to determine the expected or predictable pattern of transactions. Identification data, as under, would be required to be obtained in respect of different classes of customers: 1. For customers that are natural persons: a) Address/location details b) Recent photograph 2. For customers that are legal persons: a) Legal status of the legal person/entity through proper and relevant documents b) Verification that any person purporting to act on behalf of the legal person/entity is so authorized and identity of that person is established and verified c) Understand the ownership and control structure of the customer and determine who are the natural persons who ultimately control the legal person

Wherever applicable, information on the nature of business activity, location, mode of payments, volume of turnover, social and financial status etc. will be collected for completing the profile of the customer. Customers will be classified into three risk categories namely High, Medium and Low, based on the risk perception. The risk categorization will be reviewed periodically.

The Customer Identification Procedures are to be carried out at the following stages: o while establishing a banking relationship;

391

o when the bank feels it is necessary to obtain additional information from the existing customers based on the conduct or behaviour of the account. o Customer identitification data (including photograph/s) should be periodically updated after the account is opened. Such verification should be done atleast once in five years in case of low risk category customers and not less than once in two years in case of high and medium risk customers. o Customer Identification will also be carried out in respect of non-account holders approaching bank for high value one-off transaction as well as any person or entity connected with a financial transaction which can pose significant reputational or other risks to the Bank.

7.3

Small Deposit (No Frills) Accounts: With a view to ensuring financial inclusion such that persons, especially those belonging to low income group both in urban and rural areas, who are not able to produce such documents required by the Bank to satisfy about their identity and address, are not denied banking services, branches may open Small Deposit (No Frills) accounts, for natural persons only, with relaxed KYC standards, as detailed in the operating guidelines. Persons desirous of opening such accounts can keep aggregate balances not exceeding Rs. 50,000/- (Rupees fifty thousand only) in all their accounts taken together and the total credit, again in all accounts taken together, should not exceed Rs. 1,00,000/- (Rupees one lac only) in a year.

If at any point, the balances in all his/her accounts with the Bank (taken together) exceeds Rs. 50,000/- (Rupees fifty thousand only) or total credit in all accounts taken together exceeds Rs. 1,00,000/- (Rupees one lac only) in a year, no further transactions will be permitted until full KYC procedure is completed. Bank would notify the customers when the balances reach Rs. 40,000/- (Rupees forty thousand only) or total credit in a year reaches Rs. 80,000/- (Rupees eighty thousand only) so that appropriate documents, for complying with full KYC requirements are submitted well in time to avaoid blocking of transactions in the account.

7.4

Monitoring and Reporting of Transactions


392

Monitoring of transactions will be conducted taking into consideration the risk profile of the account. Special attention will be paid to all complex, unusually large transactions and all unusual patterns, which have no apparent economic or visible lawful purpose. Transactions that involve large amounts of cash inconsistent with the normal and expected activity of the customer will be subjected to detailed scrutiny.

System supported monitoring of transactions will be done by the AML team under the Principal Officer, based on alerts thrown up by the AML software acquired by the Bank and on the basis of feedback/inputs from LHOs, Administrative Offices, Regional Business Offices and respective relationship points. Simultaneously, however, relationship points will maintain oversight over the transactions with a view to identifying suspicious transactions and bringing them to the notice of the Principal Officer.

After due diligence at the appropriate level in the Bank, transactions of suspicious nature and/or any other type of transaction notified under PMLA will be reported by the Principal Officer to Financial Intelligence Unit India (FIU-IND), the appropriate authority. A record of such transactions will be preserved and maintained for the period as prescribed in PMLA.

Transactions in the accounts will also be monitored with a view to timely submitting, the Cash Transaction Report (CTR) in respect of cash transactions of Rs. 10,00,000/(Rupees ten lacs only) and above undertaken in an account either singly or in an integrally connected manner.

All cash transactions, where forged or counterfeit Indian currency notes have been used, shall also be reported immediately by the branches, by way of Counterfeit Currency Reports (CCRs) to the Principal Officer, through proper channel, for onward reporting to FIU-IND.

7.5

Closure of Accounts Where the appropriate KYC measures could not be applied due to non-furnishing of information and/or non-cooperation by the customer, the account can be considered for closure or terminating the banking/business relationship. Before exercising this option,
393

all efforts will be made to obtain the desired information and, in the event of failure, due notice, will be given to the customer explaining the reasons for taking such a decision. The competent authority to permit closure of such accounts shall be the Branch Head where the relationship level is RM-PB. In all other cases, Asst. General Manager (Administration) at the respective Administrative office shall be the competent authority to permit closure of such accounts.

7.6

Risk Management While the Bank has adopted a risk based approach to the implementation of this Policy, it is necessary to establish appropriate framework covering proper management oversight, systems, controls and other related matters. Banks Internal Audit of compliance with KYC/AML Policy will provide an independent evaluation of the same including legal and regulatory requirements. Concurrent/ Internal Auditors shall specifically check and verify the application of KYC/AML procedures at the branches and comment on the lapses observed in this regard. The compliance in this regard will be placed before the Audit Committee of the Board at quarterly intervals.

The Principal Officer designated by the Bank in this regard will have overall responsiblity for maintaining oversight and coordinating with various functionaries in the implementation of KYC/AML/CFT policy. However, primary responsibility of ensuring implementation of KYC/AML/CFT Policy and related guidelines will be vested with the respective Business Groups/Circles/SBUs. Suitable checks and balances in this regard will be put in place at the time of introducing new products/procedures as also at the time of review of existing products/procedures for overall risk and compliance management. For this purpose, each Business Group/Circle/SBU will designate an official as Money Laundering Reporting Officer (MLRO) who would ensure proper implementation and reporting, as per provisions of this Policy, to the Principal Officer.

8.

Employee Training

394

All employee training programmes, of 6 days duration or more, will have a module on KYC Standards/AML/CFT Measures so that members of the staff are adequately trained in KYC/AML/CFT procedures.

9.

Recruitment/Hiring of Employees KYC norms/AML standards/CFT measures have been prescribed to ensure that criminals are not allowed to misuse channels of the Bank. Bank will put in place

necessary and adequate screening mechanism as an integral part of its recruitment/hiring process of personnel.

10.

Customer Education The Bank recognizes the need to spread awareness on KYC, Anti Money Laundering measures and the rationale behind them amongst the customers and shall take suitable steps for the purpose.

11.

Introduction of New technologies Bank will pay special attention to the money laundering threats arising from new or developing technologies and take necessary steps to prevent its misuse for money laundering activities. Bank will ensure that appropriate KYC procedures are duly applied to the customers using new technology driven products.

12.

KYC for the existing accounts While the KYC guidelines will apply to all new customers, the same would be applied to the existing customers on the basis of materiality and risk. However, transactions in existing accounts would be continuously monitored for any unusual pattern in the operation of the accounts. On the basis of materiality and risk the existing accounts of companies, firms, trusts, charities, religious organizations and other institutions are subjected to minimum KYC standards which would establish the identity of the natural / legal person and those of the beneficial owners. Similarly, the Bank will also
395

ensure that term / recurring deposit accounts are subject to revised KYC procedures at the time of renewal of the deposits on the basis of materiality and risk.

13.

Branches and subsidiaries outside India This policy shall also apply to the branches, subsidiaries and majority owned joint ventures located abroad to the extent local laws of that country permit. Based on this policy, each foreign office is required to put in place an Anti-Money Laundering Policy (duly approved), which shall also contain the KYC Guidelines and Suspicious Transaction Reporting Procedures as may be required by the rules and regulations of the host country.

14.

Correspondent Banking This policy will apply to our dealings with correspondent banks. For correspondent banking relationship an appropriate due diligence procedure will be laid down keeping in view KYC standards existing in the country where the correspondent bank is located and the track record of the correspondent bank in the fight against money laundering and terrorist financing.

15.

Miscellaneous: Information collected from the customers for KYC compliance should be relevant to the perceived risk, not intrusive and should be treated as confidential. The same is not to be used/divulged for cross selling or any other such purpose. Any remittance of funds by way of demand drafts, mail/telegraphic transfer or any other mode and issue of travellers cheques for value Rs.50,000 and above is effected only by debit to customers account or against cheques/drafts and not against cash. Provisions of Foreign Contribution (Regulation) Act, 1976, as amended from time to time, wherever applicable, should be strictly adhered to. Principal Officer The Chief General Manager (Banking Operations) shall be the Principal Officer for KYC/AML/CFT matters who shall be responsible for implementation of and compliance with this policy. His illustrative duties, in this regard, will be as follows: Overall monitoring of the implementation of the Bank's KYC/AML/CFT policy. Monitoring and reporting of transactions, and sharing of information, as required under the law. Interaction with MLROs in Business Groups/SBUs for ensuring full compliance with the Policy
396

16.

17.

Timely submission of Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs) and Counterfeit Currency Reports (CCRs) to FIU-IND Maintaining liaison with the law enforcement agencies, banks and other institutions which are involved in the fight against money laundering and combating financing of terrorism. Ensuring submission of periodical reports to the Top Management /Board.

Review of the Policy The Policy will be reviewed as and when considered necessary by the Board. ********

397