SME City Centre

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Contents


Topic
Bank of India - SME City
Centre, MNZ
SME Classification
Takeover Norms
Products
Contact Us




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Bank of India - SME City Centre, MNZ


Bank of India has been playing a vital role in the development of small scale industries. The Bank has
developed a wide array of products to meet the changing needs of the industry. It provides end -to -end
solutions for the financial needs of the industry.

Apart from the general working capital requirements (like Cash credit, Bill Discounting limits, LC, BG
etc) to meet the day to day requirements and term loans to take care of investment needs for acquiring
fixed assets, Bank has an array of products/schemes to cater to the enterprise specific requirements
of SME Units both in Manufacturing and Trade and services sectors.

Bank of India has now come-up with a different vertical dedicated exclusively for SME. This exclusive
vertical is "SME City Centre" at Bank of India.

Ours is a dedicated processing house for Business Proposals above Rs. 1 Crores (both FB and Non-FB).
Disbursal of amount takes place from the desired branch of the customer covered under Mumbai North
Zone of Bank of India. There are about 48 branches that are covered under Mumbai North Zone.



























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SME Classification



New Existing Companies
Companies
Sales
Project Cost
Based Rule
Turnover
based rule
Exceptions to the rule (Sector-based)


Following sectors with the net block of Fixed Assets
> Rs. 100 Crores
Hospitality
Large
Corporat
e










Mid
Corporat
e










SME City
Centre

> Rs. 100
Crores











Rs. 10-100
Crores











< Rs. 10
Crores

> Rs. 500
Crores











Rs. 100-500
Crores











< Rs. 100
Crores
Logistics
Hospital
Educational Institutions
Real Estate (only project cost, not net block)
Job works
Other sectors (irrespective of net block) - NBFCs,
Infrastructure Companies, PSUs

Following sectors with the net block of Fixed Assets
between Rs. 10 Crores and Rs. 100 Crores
Hospitality
Logistics
Hospital
Educational Institutions
Real Estate (only project cost, not net block)
Job works
Other sectors (irrespective of net block) - Diamond
and Jewellery, Capital Market

Following sectors with the net block of Fixed
Assets < Rs. 10 Crores
Hospitality
Logistics
Hospital
Educational Institutions
Real Estate (only project cost, not net
block)
Job works



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Takeover Norms


When it comes to Takeover of account from other banks, Bank of India has specified norms for
the same, which are mentioned as under:

1. The accounts to be taken over should be standard accounts with the existing Bank.
2. The firm/company continuously registering increasing trend in sales volume and making
cash profit for at least last three years.
3. Maximum debt equity ratio of 4:1 in the case of MSME Units and 3:1 in the case of
Medium and Large Enterprises.
4. Maximum debt equity ratio of 3:1 in the case of Medium Enterprises irrespective of the
WC limit.
5. Current Ratio of 1.25:1 for accounts with limits up to Rs 5 crores, where Turnover
Method alone would be applied for assessment of the Working Capital (as against 1.30
prescribed normally).
6. Minimum Interest Service Coverage Ratio (ISCR) of 1.75
7. If Term Loan is also proposed to be taken over, the minimum Debt:Service Coverage
Ratio (DSCR) should be 1.50.
8. The Asset Coverage Ratio should not be less than 1.50.



Below is a small snap Shot which will clarify the Norms of BOI


Criteria Takeover Norms Non-Takeover cases
Above 5 Cr Below 5 Cr
Current Ratio 1.30 1.25 1.00
ISCR 1.75 1.75 N.A.
Debt Equity 3:1(in case of
MSME)
4:1(in case of
Medium &
Large)
4:1 (Quasi equity is also
considered)
Sales turnover Increasing Increasing N.A.
Profit Net Profit
making
Net Profit
making
Operating Profit
Asset Coverage ratio 1.50 1.50 Depends on Sanctioning
Authority
DSCR 1.50 1.50 1.25





Products



Brief details of some of the schemes are as under:

"STAR SME VYAPAR"



Rate of Interest depends on the extent of Collateral Coverage

Market Value of Security Rate of Interest (linked to Base Rate)
110% - 149% B.R + 2.50 %
150% - 175% B.R. + 2.25 %
More than - 175% B.R.+ 2.00 %


Target Group
Eligibility




Purpose
Nature of facility
Quantum of
Limit
Appraisal of loan





Margin
Security


Traders
All enterprises engaged in Trading in Investments in equipments as
defined by MSMED Act 2006
Satisfactory experience of business and having minimum two years of
Preceding Financial Statements
For meeting working capital needs
Cash Credit
Minimum Rs. 25 lakhs and Maximum Rs.200 lakhs


1. As per Nayak Committee recommendation i.e. 20% of sales
turnover
2. Projected turnover should not be higher than 30% of
Compounded Annual Growth Rate

Against Stock and Book Debts - 25%
Primary:
1. Hypothecation of Stocks and Book Debts(not older than 4 months).
Collateral
Minimum 110% (Market Value) of the loan amount in the form of
mortgage of immovable property





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Target Group



Eligibility




Purpose
Nature of facility


Quantum of
Limit
Appraisal of loan



Margin





Security







Target Group


Eligibility



Purpose





Items to be



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STAR SME CONTRACTOR CREDIT LINE
Civil Contractors, Mining Contractors, Engineering Contractors,
Transport Contractors etc established as Proprietorship/Partnership
firms, Limited Companies
1. Engaged in the business line at least for the last 3 years
2. Having Audited Financial Statements
3. Entry level credit rating should be SBS 5. No deviation to be
considered
For meeting working capital needs
Line of Credit by way of fund based working capital limit, Bank
Guarantee/letters of credit
Minimum Rs. 10 lakhs and Maximum Rs.500 lakhs


1. 30% of last two years average turnover
2. Of this, 2/3
rd
will be used for Fund based facility and 1/3
rd
for Non-
fund based facility such as BG/LC
Minimum 20% for fund based facility. Though the limit will be treated
as unsecured, contractors will have receivables which should be charged to the
Bank and a margin of 20% maintained there against.
Minimum 15% cash margin for non-fund based facility
Primary:
2. First charge on the unencumbered assets of the company/firm both
current and fixed assets.
3. Margin on non fund based limits

STAR SME AUTO EXPRESS
All existing SME units, as per new definition, run by Individuals,
Proprietorship/Partnership firms, Limited Company, Trust, Society
The unit/borrower should have sufficient net worth/ source of funds to
pay for the margin and initial recurring expenses. Conduct of the existing
account must have been satisfactory.
To purchase transport vehicles for delivering their products/services.
Educational Institutions also eligible for transport vehicles for providing
transportation services to students/faculty/staff. Only new vehicles will be
considered. Second hand vehicles not permitted under the scheme.
Chassis + Body building costs + registration, insurance, road tax,
financed
Nature of facility
Repayment


Security















Target Group



Eligibility


Purpose
accessories AMC etc.
Term Loan
To be repaid in 84 equated monthly instalments inclusive of
moratorium, of maximum 3 months
1. Primary: Hypothecation of the vehicle purchased out of the
proceeds of the loan. Bank's name as charge holder to be got entered in
the books of the RTO and also the Registration certificate.
2. Collateral: Micro and Small (Services Enterprises), can be sanctioned
collateral free term loan up to Rs. 100 lakhs, subject to coverage under
guarantee provided by Credit Guarantee Fund Trust for Micro & Small
Enterprises(CGTMSE). For loans above Rs. 100 lakhs, suitable
collateral security to be obtained depending upon the
merits of individual cases

STAR SME LIQUID PLUS
Proprietorship/Partnership firms, Limited Companies falling within the
new definition of SME, engaged in the business for the past 3 years with
audited financial statement of accounts
The borrower should have known source of funds to pay for the margin
and initial recurring expenses.
General purpose term loan for SME constituents Viz., for R&D activity,
marketing and advertisement expenses, Purchase of Preliminary
expenses etc
Nature of facility Term Loan
Repayment To be repaid in 84 equated monthly instalments within a period of 7
years inclusive of moratorium period of up to 12 months. Interest to be serviced
as and when debited.
Appraisal of Loan 50% of unencumbered value of the property under offer or 75% of
actual requirement for the stated purpose whichever is less
Minimum: Rs. 10 lakhs
Maximum: Rs. 500 lakhs
Note: Extant guidelines with regard to valuation of property, title
clearance and inspection by two different officials etc. must be strictly adhered
to.
Average DSCR should be minimum 1.25
Margin As stated above



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Security















Target Group
Eligibility









Purpose
1. Primary: Hypothecation of assets or mortgage of land, if loan is
considered for the purpose. If no assets are created then it should be treated
as clean.
2. Collateral: EQM or Registered Mortgage of Residential/commercial
property (first charge) either of borrower or of guarantor. However
following conditions with regard to property under offer should be
fulfilled:
a. It should not be an agricultural property
b. It should not be a vacant land


STAR SME EDCUATION PLUS
Educational Institutions viz., Universities Colleges, Schools
1. The Institutions must have got necessary approval from Government
agencies for running the educational institution
2. They should submit 3 years audited financial statements
3. They should be profit making for continuous 2 years
4. New and upcoming educational institutions can also be considered
whose projections financially must be reasonable and justified.
5. Entry level credit rating is SBS 5. No deviation to be allowed.
1. Construction/Renovation/Repair of building. Approval for
construction/ addition/alteration from all the concerned authorities must be
in place for considering the credit facility.
2. Purchase of Computer lab equipment, Furniture & Fixtures, books
etc.
Nature of Facility Term Loan
Quantum of Minimum Rs. 10 lakhs and Maximum Rs. 500 lakhs
Loan
Repayment Term Loan to be repaid in maximum 8 years inclusive of initial
moratorium of 12 to 18 months. Periodicity of instalments to be
determined on the basis of cash flow.
Appraisal of Loan The proponent should have sufficient cash flow to service both
instalment and interest. DSCR should be minimum 1.25.
Margin Minimum 20%
Security Primary:
1. Hypothecation of assets, if loan is considered for
machineries/equipments.

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2. Mortgage of land & building over which construction is proposed
Collateral.
3. Suitable collateral to be obtained so that minimum Asset Cover of
1.50 is available. Guarantee of key person/promoter/trustee must
be taken




Contact Person
Nilesh Pawar
Marketing Manager
Bank of India - SME City Centre
nilesh.pawar@bankofindia.co.in
+91- 9967944426


Office Address
Bank of India - SME City Centre
2nd floor
Flexcel Park (Near 24 Karat Multiplex)
S.V. Road
Jogeshwari (West) Mumbai - 400 102
Phone: 022-2677 0111 / 112 / 114 / 115
Fax: 2677 0113