Professional Documents
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MASTER CIRCULAR
SME BUSINESS UNIT
LOAN PRODUCT : SME SMART SCORE
We have been issuing Circulars/ Instructions containing operating instructions on the product
SME Smart Score from time to time. To enable the operating functionaries to have current
instructions at one place, a Master Circular incorporating all the existing Circulars/
Instructions has been prepared and is appended. We advise that this Master Circular
consolidates all the previous instructions issued up to 31/03/2009 vide the circulars listed in
the Annexure-V
Yours faithfully,
Sd/Chief General Manager (SME)
SME BU Master Circular as on 31.03.2009
Page 1 of 1
MASTER CIRCULAR
SME SMART SCORE
INDEX
Sr. No.
1.
Contents
Introduction
Silent Features of the Product SME Smart Score
Product Details
2.
Page No.
4
5
Formats
Annexure I Loan Application Form
Personal details
6
7
Business details
13
17
18
23
24
26
3.
27
30
31
Fill out the score sheet and calculate the score for personal, business and
collateral parameters.
ii)
Find out the eligibility of the applicant based on total cut-off and segment wise
cut-off (there is minimum score to be reached in personal and business segment)
iii)
If eligible, verify the responses from the supporting documents for correctness
iv)
Assess the limits required, repayment programme for the term loan and put up a
simple note to the sanctioning authority for sanction.
v)
vi)
Eligibility
Purpose
Type of
facilities
Quantum of
Finance
Margin
Rate of Interest
(with effect
from 29.06.09)
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.
25% for working capital component and 33% for TL component.
Size of Credit Limit
Repayable on
Repayable in 3 years and
demand or up to 3
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 up to Rs. 50 Lacs
Security:
- Primary
Hypothecation of stocks and assets financed by Bank
As per Bank's extant norms for WC and TLs
- Collateral
Processing fees As applicable to SSI /SBF / C&I units as per CPPD circulars
Repayment
WC loan to be renewed every two years with annual review of performance.
TL not more than 5 years excluding moratorium not exceeding 6 months
Documentation As per simplified SME documentation
Special features A simplified appraisal model (enclosed) has been developed to 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.
ANNEXURE-I
Please fill up this form only if the answers to all the following questions are YES
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 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?
Whether the promoters being 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
City
Telephone No
Mobile
Fax:
Address(factory):
Plot/Building/Plat Name and Number
Street Name
City
Telephone No
Mobile
Fax:
Loan Applied for
Purpose of the Loan
repaid?
PERSONAL DETAILS OF THE CHIEF PROMOTER / CHIEF EXECUTIVE
Name of the Chief / Promoter / Chief
Executive
Residential Address:
Plot/Building/Plat Name and Number
Street Name
City
Telephone No
Mobile
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
Yes /NO
Your Account Number/ How long are you having deposit account with SBI? What would be
the minimum balance in the account?
BUSINESS DETAILS
Year of commencement of business
State the profit / loss for the last 3 financial years
YEAR I
YEAR II
YEAR III
YEAR II
Owned
YEAR III
Rented
Does the product require special know how? If so, are you in possession of the know
How do you plan to produces 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 the utilities like water power etc? Please describe the requirements and
how are they met?
Whether you need skilled labour? Please describe your plants for 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 big enough to
subscribe the finished product of your firm? Any other advantage?
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 network
PARAMETER
YEAR I
YEAR II
YEAR III
What is the quality of your receivables? How many months sales do they represent? Can
you give an ageing of your receivables?
AGE
AMOUNT
PERCENTAGE TO TOTAL
What is the quality of your finished goods inventory? Are they sold against order / as and
when produced? 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? Can you cut short the cycle without increasing your liability?
Give the details of cost and the means of finance for your project
ITEM
Land
Building
Machinery
Other Items
HOW
DO
YOU
PROPOSED
TO
ACQUIRE / PROCURE
THE ITEM
AMOUNT
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?
VALUE
BASIS
TOTAL
Please tell us about your future plans
What is the level of sales you are projecting? Briefly describe the basis
What is the level of receivables you are expecting in terms of months sale?
What is the level of furnished goods inventory you are expecting to maintain in terms of
months sale?
I certify that all information furnished by me / us is true, correct and complete. I have no
barrowing engagement for the company / firm with any bank except as indicated in the
application form. There are no overdues / statutory 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 may deem fit. You, your representatives 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 promises as give 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:
Date:
LOAN APPRAISAL
ANNEXURE-II
ASST GENERAL MANAGER / CHIEF MANAGER: - FOR SANCTION
APPRAISAL MEMORANDUM UNDER SME SMART SCORE
Branch:
SEGMENT
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
Greenfield 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
e.
2. Details of Credit limits
Facility
Existing Limits
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
SME BU Master Circular as on 31.03.2009
Page 14 of 14
Rs.in lakhs
Facility
CC(Hyp)
SME Credit Plus
TL
LC/BG(As sub limit of
CC(Hyp))
Total limits
Proposed Limits
6.Constitution
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
Facility
Limit
M.V
A.V
D.P
O/S
(Rs in lakhs)
Irregularity if any
Rs.in lakhs.
CURRENT FOLLOWING
YEAR
YEAR
Projections
Estimates
16.Term Loan:
Project Details
Project Cost
Rs.
Bank Loan Recommended
Rs.
(As per assessment in annexure-III)
Debt /Equity
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
PARTICULARS
DATE
POSITION
RBI Willful Defaulters list(Non-Suit Filed)Rs.25lacs and
above
CIBIL List(Suit filed) Rs.25 lacs and above
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
22. Recommendations;
Recommended for sanction of
Working Capital limit of
Term loan of
Total limit
Rs.
Rs.
--------------------------Rs.
Sanctioned by
Designation
Date
Enclosure:
Applicants application.& others
Statement of Credit Score arrived as Annexure -I.
Controlled by
Signature
Name
Designation
Date
Facility
Limit
Security
Primary
WC:
TL:
Collateral
3.
Personal Guarantee
(Indicate Net worth of
Guarantors with date of
compilation of opinion
reports)
Interest
CC(HYP):
(Linked to SBAR)
TL:
4.
Margin(%)
4.
Repayment
5.
6.
Validity of Sanction,
Review/Renewal
Inspection
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
7.
Stock Statement
To be submitted monthly.
7.
Insurance
8.
Processing fee
9.
EM Charges
10.
Commitment Charges
11.
12.
13.
Penal Interest
Documents
As per SME Documentation
Other Stipulations, if
any.
CC(HYP):Term Loan:-
ASSESSMENT OF LOAN
II-B
ANNEXURE-
Estimated Projected
Ist year
2nd Year
Rs.in lakhs
Sr. No
1
2
3
Particulars
Estimated
Projected
Ist year
2nd year
Estimated Exports
Exports - at cost
Lead time and usance period
(includes order period / manufacturing period etc.)
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
Estimated
Projected
Ist year
2nd year
% (A)
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:
Cost
Rs.in lakhs.
Margin amount
Required Bank
Finance
Margin (%)
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
finance
Debt /Equity :
of
3. Details of capital expenditure i.e land and factory building as well as machinery
proposed to purchase:
1
(Act)
Net Profit
Depreciation
Cash Accruals
Repayment obligations
(including Interest)
DSCR
Average DSCR
6. Project implementation schedule:
2
(E)
3
(E)
4
(E)
Rs.in lakhs
5
6
(E)
(E)
Rs.
Rs.
Rs.
Assessment:
Earnings
1
Total No. of Kilometers to be run per day (estimated)/ No. of
trips per day
2
Earnings per Km / earning per trip
3
No. of working days in a month
4
Total monthly earnings 1 x 2 x 3 ..A
Expenses
5
Cost of Fuel per litre
6
Quantity of fuel required per month
7
Cost of fuel per month
8
Monthly Wages / batta for driver / cleaner etc
9
Maintenance
10
Repair
11
Insurance (annual premium / 12)
12
MV Tax (annual tax /12)
13
Interest on borrowings
14
Sustenance
15
Other expenses
Total Monthly Expenses (5 to 15).B
16
Monthly surplus . A - B
17
Monthly TL repayment
18
DSCR 16/17
Brief details of above workings:
ANNEXURE-
III
Name of the Company / Firm
1.
Personal details :
Sr.No. Parameters
Maximum
marks
Age
No.of children
Owning a house
Academic qualifications
Spouse details
MARKS SCORED
30
Marks
Scored
Criteria
Marks
18 to 24
25 to 49
50 to 59
60 to 65
Upto 3
>3
Own
Not owning
house
Professional
Graduate/PG
Metric
Below Metric
> 5 years
2 to 5 years
< 2 years
Employed
Homemaker
Assessed
Not assessed
3 Yrs. & above
6 M to < 3 Yrs.
<6M
3
5
1
0
2
0
5
0
Yes
No
1
0
4
2
1
0
5
3
0
1
0
2
0
5
2
0
2.
Business Score :
2.(i) 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.
Parameters
Maximum Marks
Criteria
Marks
No.
marks
Scored
1
Years in business
5
5 Years & over
5
3 Years to < 5
3
1 year to < 3
1
2
Continuous net profits (before
5
Last 3 years
5
tax)
Last 2 years
3
Last year
1
3
Sales show a rising trend
5
Last 3 years
5
Last 2 years
3
4
Factory premises
3
Owned or over 5
years of lease
3
Rented
0
5
Know-how
2
Specialised
2
Common
0
6
Line of activity
1
Priority Sector
1
Non priority
0
7
Competition
4
Low
4
Medium
2
High
0
8
TOL/TNW (quasi equity to be
5
2 & Below
5
added to TNW and reduced from
> 2 but upto 3
4
TOL)
> 3 but upto 4
2
> 4 but < 5
1
5
9 a Quality of receivables
5
Upto 3 months of
sales
1
> 3 but upto 4
months of sales
0
> 4 months of sales
5
9 b Quality of finished goods
5
Upto 1 month of
inventory
sales
1
> 1 but upto 2
months of sales
0
> 2 months of sales
5
10 Repayment period (not applicable
5
Upto 3 years
3
for only working capital loans)
> 3 to 5 years
0
> 5 years
5
11 Gross DSCR (not applicable for
5
> 2
2
only working capital loans
1.5 To 2
0
< 1.5
50
MARKS SCORED
Items 10 & 11 are not applicable for working capital loans alone. In that case the
score should be normalized for 50
(marks scored/40)*50
Minimum score should be 25
Maximum
marks
10
Marks
Scored
Criteria
Marks
Yes
No
10
0
Yes
Mo
5
0
Yes
No
2
0
Easy
Ok
Good
Ok
2
0
5
0
Line of activity
1
0
Priority
Sector
Non priority
1 and below
> 1 upto 2
> 2 upto 3
>3
Upto 3
months of
sales
> 3 but upto 4
months of
sales
> 4 months of
sales
Upto 1 month
of sales
> 1 but upto 2
months of
sales
> 2 months of
4
5
8a
8b
5
4
3
0
5
1
0
5
1
0
10
MARKS SCORED
Minimum Marks : 25 out of 50
50 / 40
sales
Upto 3 years
> 3 to 5 years
> 5 years
> 2
1.5 to 2
< 1.5
5
3
0
5
2
0
3.
Collateral conditions:
Sr.
No.
1
Parameters
Equitable Mortgage of property :
Value of property (if TDR or
cash equivalent is offered as
security multiply cash equivalent
by 2 and add to the collateral
value) / loan amount (%)
Residential property as part of 1
MARKS SCORED
Maximum
marks
15
Marks
Scored
Criteria
Marks
15
10
5
3
0
Yes
No
5
0
20
Minimum Marks are 10 (except in cases where Collateral should not be asked as per Banks
norms, where the minimum marks will be NIL)
Appraised by
Name
Date
Approved by
RENEWAL PROPOSALS
IV
ANNEXURE-
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
CC
TL
LC/BG
Comments on Conduct of above accounts:
Irregularity if
any
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)
9. Conduct of WC a/c
(Rs. In lakhs)
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
Date
Approved by
Parameters
Actual sales/projected
sales
Maximum
marks
10
PBT/NS (%)
10
Change in TOL/TNW
during the year
15
MARKS SCORED
50
10
Marks
Scored
Criteria
90% & above
70% to < 90%
50% to < 70%
Below 50%
Increasing
Flat
Decreasing
Decreasing and upto 3
Decreasing but above 3
Increasing but upto 3
Increasing but above 3
Excellent
Good
OK
90% & above
70 89%
50 69%
< 50% (% of sales)
Mar
ks
10
8
5
2
10
5
1
5
3
3
0
15
10
5
10
7
5
NIL
Appraised by
Name
Date
Approved by
CIRCULAR REFERENCES
ANNEXURE-V