|
RBI/2006-07/
37
RPCD.PLNFS. BC.
No.6/ 06.02.31/ 2007-08 July
2, 2007 The Chairman/Managing
Director/
Chief Executive
Officer
All Scheduled
Commercial Banks
(including
Regional Rural Banks/Local Area Banks)Dear
Sir, MASTER
CIRCULAR -
LENDING
TO SMALL & MEDIUM ENTERPRISES (SMEs) SECTOR As
you are aware, the Reserve Bank of India has, from time to time, issued a number
of guidelines/instructions/directives to banks in regard to matters relating to
lending to Micro, Small & Medium Enterprises Sector.
To enable the banks to have current instructions at one place, a Master Circular
incorporating the existing guidelines/instructions/directives on the subject has
been prepared and is appended. This Master Circular consolidates the instructions
issued by the RBI up to June 30, 2007, which are listed in the Appendix, to
the extent they deal with the MSME sector lending by commercial
banks. Please
acknowledge receipt. Yours
faithfully, (G.Srinivasan)
Chief General Manager
SECTION-I
SECTION-II
SECTION-III
SECTION-IV
Annexure
I
Annexure
II
Annexure III
Annexure
IV
Appendix
LENDING
TO SME SECTOR SECTION-I
| 1 |
Small
Enterprises | |
1.1.1
|
Small (manufacturing) Enterprises | |
|
Enterprise engaged in the manufacture/production or preservation of goods and
whose investment in plant and machinery (original cost excluding land and building
and the items specified by the Ministry of Small Scale Industries vide its notification
No. S.O. 1722(E) dated October 5, 2006 as furnished in Annexure I)
does not exceed Rs. 5 crore
| |
1.1.2
|
Small (service) Enterprises | | |
Enterprise engaged in the providing/rendering of services and whose investment
in equipment (original cost excluding land and building and furniture, fittings
and other not directly related to the service rendered or as may be under the
Micro, Small and Medium Enterprises Development, (MSMED), Act 2006) does not
exceed Rs. 2 crore.
| |
1.2.1
|
Micro (manufacturing) Enterprises
Enterprise
engaged in the manufacture/production or preservation of goods and whose investment
in plant and machinery (original cost excluding land and building and such items
as in 1.1.1) does not exceed Rs. 25 lakh, irrespective of the location
of the unit. | |
1.2.2
| Micro
(service) Enterprises | |
|
Enterprise engaged in the providing/rendering of services and whose investment
in equipment (original cost excluding land and building and furniture, fittings
and such items as in 1.1.2) does not exceed Rs. 10 lakh.
|
| 1.3.1
| Medium
(manufacturing) Enterprises
Enterprise engaged in the manufacture/production or preservation of goods and
whose investment in plant and machinery (original cost excluding land and building
and the items specified by the Ministry of Small Scale Industries vide its notification
No. S.O. 1722(E) dated October 5, 2006) is more than Rs. 5 crore but does
not exceed Rs. 10 crore. | |
1.3.2
| Medium
(service) Enterprises Enterprise
engaged in the providing/rendering of services and whose investment in equipment
(original cost excluding land and building and furniture, fittings and such items
as in 1.1.2) is more than Rs. 2 crore but does not exceed Rs.
5 crore. The
small and micro (service) enterprises shall include small road & water transport
operators, small business, professional & self-employed persons and all other
service enterprises. Bank's
lending to medium enterprises will not be included for the purpose of reckoning
under priority sector. | |
1.4 |
Khadi
and Village Industries Sector (KVI)
All advances granted to units in the KVI sector, irrespective of their size of
operations, location and amount of original investment in plant and machinery.
Such advances will be eligible for consideration under the sub-target (60 per
cent) of the small enterprises segment within the priority sector |
1.5
INDIRECT FINANCE
| 1.5.1 |
Persons involved in assisting the decentralised sector in the supply of inputs
and marketing of outputs of artisans, village and cottage industries. |
| 1.5.2 |
Advances to cooperatives of producers in the decentralised sector viz. artisans,
village and cottage industries. | |
1.5.3 |
Existing investments as on March 31, 2007, made by banks in special bonds
issued by NABARD with the objective of financing exclusively non- farm sector
may be classified as indirect finance to Small Enterprises sector till the date
of maturity of such bonds or March 2010, whichever is earlier. Investments in
such special bonds made subsequent to March 31, 2007 will, however, not be eligible
for such classification. | |
1.5.4 |
Deposits placed with SIDBI by foreign banks, having offices in India, on account
of non-achievement of priority sector lending targets/sub-targets and outstanding
as on April 30, 2007 would be eligible for classification as indirect finance
to Small Enterprises sector till the date of maturity of such deposits or March
31, 2010, whichever is earlier. However, fresh deposits placed by banks' on or
after April 30, 2007 with SIDBI on account of non-achievement of priority sector
lending targets/sub-targets would not be eligible for classification as indirect
finance to Small Enterprises Sector. | |
1.5.5
|
Loans granted by banks to NBFCs for on-lending to small and micro enterprises
(manufacturing as well as service) |
SECTION
II
| CERTAIN
TYPES OF funds deployment eligible as priority sector advances |
| 1. 1.1 |
INVESTMENTS
SECURITIZED ASSETS Investments
made by banks in securitised assets, representing loans to various categories
of priority sector, shall be eligible for classification under respective categories
of priority sector (direct or indirect) depending on the underlying assets, provided
the securitised assets are originated by banks and financial institutions and
fulfil the Reserve Bank of India guidelines on securitisation. This would mean
that the bank's investments in the above categories of securitised assets shall
be eligible for classification under the respective categories of priority sector
only if the securitised advances were eligible to be classified as priority sector
advances before their securitisation. | |
1.2 |
Outright
purchases of any loan asset eligible to be categorised under priority sector,
shall be eligible for classification under the respective categories of priority
sector (direct or indirect), provided the loans purchased are eligible to be categorised
under priority sector; the loan assets are purchased (after due diligence and
at fair value) from banks and financial institutions, without any recourse to
the seller; and the eligible loan assets are not disposed of, other than by way
of repayment, within a period of six months from the date of purchase. |
| 1.3 |
Investments
by banks in Inter Bank Certificates (IBPCs), on a risk sharing basis, shall be
eligible for classification under respective categories of priority sector, provided
the underlying assets are eligible to be categorised under the respective categories
of priority sector and are held for at least 180 days from the date of investment. |
2. SCHEME
OF SMALL ENTERPRISES FINANCIAL CENTRES (SEFCs): As
per announcement made by the Governor in the Annual Policy Statement 2005-06,
a scheme for strategic alliance between branches of banks and SIDBI located in
clusters, named as "Small Enterprises Financial Centres" has been
formulated in consultation with the Ministry of SSI and Banking Division,
Ministry of Finance, Government of India, SIDBI, IBA and select banks
and circulated to all scheduled commercial banks on May 20, 2005 for implementation.
Initially, SIDBI had decided to start 149 such centres. SIDBI has so far executed
MoU with 16 banks so far (Bank of India, UCO Bank, YES Bank, Bank of Baroda, Oriental
Bank of Commerce, Punjab National Bank, Dena Bank, Andhra Bank, Indian Bank, Corporation
Bank, IDBI Bank, Indian Overseas Bank, Union Bank of India, State Bank of India,
State Bank of Saurashtra and Federal Bank). List of SME clusters covered by existing
SIDBI branches is furnised in Annexure II. SECTION
III
| targets
for priority sector lending by DOMESTIC commercial banks (excluding RRBs) |
| 1. |
Main
Targets for All DOMESTIC Commercial Banks excluding Foreign Banks |
| 1.1 |
The
domestic commercial banks are expected to enlarge credit to priority sector and
ensure that priority sector advances (which includes the small enterprises sector)
constitute 40 per cent of Adjusted Net Bank Credit (ANBC) or credit equivalent
amount of Off-Balance Sheet Exposure, whichever is higher. |
| 1.2 |
While
there is no sub-target fixed for lending to small enterprises sector, as per the
policy package announced by the Government of India for stepping up credit to
SME sector, banks may fix self set target for growth in advances to SME sector
in order to achieve a minimum 20% year on year growth in credit to SMEs with the
objective to double the flow of credit to the SME sector within a period of 5
years i.e. from 2005-06 to 2009-10. | |
1.3 |
In
order to ensure that credit is available to all segments of the Small Enterprises
sector, banks should ensure that :- | | | (a) |
40
per cent of the total advances to small enterprises sector should go to micro
(manufacturing) enterprises having investment in plant and machinery up to Rs.
5 lakh and micro (service ) enterprises having investment in equipment up to Rs.
2 lakh; | | | (b) |
20
per cent of the total advances to small enterprises sector should go to micro
(manufacturing) enterprises with investment in plant and machinery above Rs. 5
lakh and up to Rs. 25 lakh, and micro (service) enterprises with investment in
equipment above Rs. 2 lakh and up to Rs. 10 lakh. (Thus 60 per cent of small enterprises
advances should go to the micro enterprises) | |
2. |
Targets
for Foreign Banks | |
2.1.1 |
Foreign
banks are expected to enlarge credit to priority sector and ensure that priority
sector advances (which includes the Small Enterprises sector) constitute 32 per
cent of Adjusted Net Bank Credit (ANBC) or credit equivalent amount of Off-Balance
Sheet Exposure, whichever is higher. | |
2.1.2 |
Within
the overall target of 32 per cent to be achieved by foreign banks, the advances
to small enterprises sector should not be 10 per cent of the adjusted net bank
credit (ANBC) or credit equivalent amount of Off-Balance Sheet Exposure, whichever
is higher. | |
2.1.3 |
In
order to ensure that credit is available to all segments of the Small Enterprises
sector, banks should ensure that :-(a)
40 per cent of the total advances to small enterprises sector should go to micro
(manufacturing) enterprises having investment in plant and machinery up to Rs.
5 lakh and micro (service ) enterprises having investment in equipment up
to Rs. 2 lakh;(b) 20
per cent of the total advances to small enterprises sector should go to micro
(manufacturing) enterprises with investment in plant and machinery above Rs. 5
lakh and up to Rs. 25 lakh, and micro (service) enterprises with investment in
equipment above Rs. 2 lakh and up to Rs. 10 lakh. (Thus 60 per cent of small enterprises
advances should go to the micro enterprises)[The
net bank credit should tally with the figures reported in the fortnightly return
submitted under section 42(2) of the Reserve Bank of India Act, 1934. Outstanding
deposits under the FCNR (B) and NRNR Schemes are excluded from net bank credit
for computation of priority sector lending target/ sub-targets. However, as the
NRNR scheme has been discontinued, the existing accounts under NRNR account scheme
may be continued only up to the date of maturity as advised vide circular DBOD.
DIR. BC. 93/13.01.09/2001-02 dated April 29, 2002.] | |
3. |
DEPOSIT
by Foreign Banks WITH SIDBI towards shortfall in priority sector lending |
| 3.1
|
The
foreign banks having shortfall in lending to stipulated priority sector targets
/sub-targets will be required to contribute to Small Enterprises Development Fund
(SEDF) to be set up by Small Industries Development Bank of India (SIDBI), or
for such other purpose as may be stipulated by Reserve bank of India. |
| 3.2
3.3 |
For
the purpose of such allocation, the achievement level of priority sector lending
as on the last reporting Friday of March of the immediately preceding financial
year will be taken into account. The
corpus of SEDF shall be decided by Reserve Bank of India on a year-to-year basis.
The tenor of the deposits shall be for a period of three years or as decided by
Reserve Bank from time to time. Fifty percent of the corpus shall be contributed
by foreign banks having shortfall in lending to priority sector target of 32 per
cent of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever
is higher, on a pro-rata basis. The balance fifty per cent of the corpus shall
be contributed by foreign banks having aggregate shortfall in lending to Small
Enterprises sector and export sector of 10 per cent and 12 per cent respectively,
of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever is
higher, on a pro-rata basis. The contribution required to be made by foreign banks
would, however, not be more than the amount of shortfall in priority sector lending
target/sub-target of the foreign banks. | |
3.4 3.5 |
The
concerned foreign banks will be called upon by SIDBI/or such other institution
as may be decided by Reserve Bank, as and when funds are required by them, after
giving one month's notice. The
interest rates on foreign banks' contribution, period of deposits, etc. shall
be fixed by Reserve Bank of India from time to time. | |
4. |
Non-achievement
of priority sector targets and sub-targets will be taken into account while granting
regulatory clearances/approvals for various purposes. |
| [ANBC
or credit equivalent of Off-Balance Sheet Exposures (as defined by Department
of Banking Operations and Development of Reserve Bank of India from time to time)
will be computed with reference to the outstanding as on March 31 of the previous
year. For this purpose, outstanding FCNR (B) and NRNR deposits balances will no
longer be deducted for computation of ANBC for priority sector lending purposes.
For the purpose of priority sector lending, ANBC denotes NBC plus investments
made by banks in non-SLR bonds held in HTM category. Investments made by banks
in the Recapitalisation Bonds floated by Government of India will not be taken
into account for the purpose of calculation of ANBC. Existing investments, as
on the date of circular RPCD.No.Plan. BC.84/04.09.01/2006-07 dated April 30, 2007,
made by banks in non-SLR bonds held in HTM category will not be taken into account
for calculation of ANBC, up to March 31, 2010. However, fresh investments by banks
in non-SLR bonds held in HTM category will be taken into account for the purpose.
Deposits placed with NABARD/SIDBI, as the case may be, in lieu of non-achievement
of priority sector lending targets/sub-targets, though shown under Schedule 8
–'Investments' in the Balance Sheet at item I (vi)- 'Others', will not be treated
as investment in non-SLR bonds held under HTM category. For the purpose of calculation
of credit equivalent of off-balance sheet exposures, banks may use current exposure
method. Inter-bank exposures will not be taken into account for the purpose of
priority sector lending targets/sub-targets.] |
SECTION
IV
| common
guidelines/INSTRUCTIONS for LENDING TO Small ENTERPTRISES sector |
| 1.
Disposal of Applications All
loan applications for SSI up to a credit limit of Rs. 25,000/- should be disposed
of within 2 weeks and those up to Rs. 5 lakh within 4 weeks provided the loan
applications are complete in all respects and accompanied by a 'check list'. |
| 2
Collaterals The
limit for all SSI borrowal accounts for obtention of collateral security is Rs
5 lakh. Banks may on the basis of good track record and financial position of
the SSI units, increase the limit of dispensation of collateral requirement for
loans up to Rs.25 lakh (with the approval of the appropriate authority). 3.
Composite loan A
composite loan limit of Rs.1crore can be sanctioned by banks to enable the SSI
entrepreneurs to avail of their working capital and term loan requirement through
Single Window. 4.
Specialised SSI/SME branches Public
sector banks have been advised to open at least one Specialised branch in each
district. Further banks have been permitted to categories their SSI general
banking branches having 60% or more of their advances to SSI sector as Public
sector banks have been advised to open at least one Specialised SSI specialised
SSI branches in order to encourage them to open more specialised SSI branches
for providing better service to this sector as a whole. As per the policy package
announced by the Government of India for stepping up credit to SME sector, the
public sector banks will ensure specialized SME branches in identified clusters/centres
with preponderance of small enterprises to enable the entrepreneurs to have
easy access to the bank credit and to equip bank personnel to develop requisite
expertise. The existing specialised SSI branches may be also be redesignated as
SME branches. Though their core competence will be utilized for extending finance
and other services to SME sector, they will have operational flexibility to extend
finance/render other services to other sectors/borrowers |
|
5. Delayed Payment
Under
the Amendment Act, 1998 of Interest on Delayed Payment to Small Scale and Ancillary
Industrial Undertakings, penal provisions have been incorporated to take care
of delayed payments to SSI units which inter-alia stipulates a) agreement between
seller and buyer shall not exceed more than 120 days b) payment of interest by
the buyers at the rate of one and a half times the prime lending rate (PLR) of
SBI for any delay beyond the agreed period not exceeding 120 days. Further, banks
have been advised to fix sub-limits within the overall working capital limits
to the large borrowers specifically for meeting the payment obligation in respect
of purchases from SSI. After
the enactment of the Micro, Small and Medium Enterprises Development (MSMED),
Act 2006, the existing provisions of the Interest on Delayed Payment Act, 1998
to Small Scale and Ancillary Industrial Undertakings, have been strengthened as
under: (i)The
buyer to make payment on or before the date agreed on between him and the supplier
in writing or, in case of no agreement before the appointed day. The agreement
between seller and buyer shall not exceed more than 45 days. (ii)The
buyer fails to make payment of the amount to the supplier, he shall be liable
to pay compound interest with monthly rests to the supplier on the amount from
the appointed day or, on the date agreed on, at three times of the Bank Rate notified
by Reserve Bank. (iii)For
any goods supplied or services rendered by the supplier, the buyer shall be liable
to pay the interest as advised at (ii) above. (iv)In
case of dispute with regard to any amount due, a reference shall be made to the
Micro and Small Enterprises Facilitation Council, constituted by the respective
State Government. | |
6.
Guidelines on rehabilitation of sick SSI units (based on Kohli Working Group recommendations)
As per the definition, a unit is considered as sick when any of the borrowal account
of the unit remains substandard for more than 6 months or there is erosion in
the net worth due to accumulated cash losses to the extent of 50% of its net worth
during the previous accounting year and the unit has been in commercial production
for at least two years. The criteria will enable banks to detect sickness at an
early stage and facilitate corrective action for revival of the unit. As per the
guidelines, the rehabilitation package should be fully implemented within six
months from the date the unit is declared as potentially viable/viable. During
this six months period of identifying and implementing rehabilitation package
banks/FIs are required to do "holding operation" which will allow the
sick unit to draw funds from the cash credit account at least to the extent of
deposit of sale proceeds Following
are broad parameters for grant of relief and concessions for revival of potentially
viable sick SSI units:
(i)
Interest on Working CapitalInterest 1.5% below the prevailing fixed / prime lending
rate, wherever applicable
(ii)
Funded Interest Term Loan Interest Free
(iii)
Working Capital Term LoanInterest to be charged 1.5% below the prevailing fixed/prime
lending rate, wherever applicable
(iv)
Term LoanConcessions in the interest to be given not more than 2 % (not more
than 3 % in the case of tiny / decentralised sector units) below the document
rate.
(v) Contingency
Loan Assistance The Concessional rate allowed forWorking Capital Assistance |
|
7. State Level Inter Institutional Committee In
order to deal with the problems of co-ordination for rehabilitation of sick small
scale units, State Level Inter-Institutional Committees (SLIICs) have been set
up in all the States. The meetings of these Committees are convened by Regional
Offices of RBI and presided over by the Secretary, Industry of the concerned State
Government. It provides a useful forum for adequate interfacing between the State
Government Officials and State Level Institutions on the one side and the term
lending institutions and banks on the other. It closely monitors timely sanction
of working capital to units which have been provided term loans by SFCs, implementation
of special schemes such as Margin Money Scheme of State Government, National Equity
Fund Scheme of SIDBI, and reviews general problems faced by industries and sickness
in SSI sector based on the data furnished by banks. Among others, the representatives
of the local state level SSI associations are invited to the meetings of SLIIC
which are held quarterly. A sub-committee of SLIIC looks into the problems of
individual sick SSI unit and submits its recommendations to the forum of SLIIC
for consideration. | |
8.
Empowered Committee on SMEs As
part of the announcement made by the Union Finance Minister, at the Regional Offices
of Reserve Bank of India, Empowered Committees on SMEs have been constituted under
the Chairmanship of the Regional Directors with the representatives of SLBC Convenor,
senior level officers from two banks having predominant share in SME financing
in the state, representative of SIDBI Regional Office, the Director of Industries
of the State Government, one or two senior level representatives from the SME/SSI
Associations in the state, and a senior level officer from SFC/SIDC as members.
The Committee will meet periodically and review the progress in SME financing
as also rehabilitation of sick SSI/ME units. It will also coordinate with other
banks/financial institutions and the state government in removing bottlenecks,
if any, to ensure smooth flow of credit to the sector. The committees may decide
the need to have similar committees at cluster/district levels. |
| 9.
Debt Restructuring Mechanism for SMEs
As part of announcement made by the Hon'ble Finance Minister for stepping
up credit to small and medium enterprises, a debt restructuring mechanism for
units in SME sector has been formulated by Department of Banking Operations &
Development of Reserve Bank of India and advised all commercial banks vide circular
DBOD. BP. BC. No. 34 / 21.04.132/ 2005-06 dated September 8, 2005. These
detailed guidelines have been issued to ensure restructuring of debt of all
eligible small and medium enterprises. These guidelines would be applicable to
the following entities, which are viable or potentially viable: |
| a)
All non-corporate SMEs irrespective of the level of dues
to banks.
b)
All corporate SMEs, which are enjoying banking facilities from a single bank,
irrespective of the level of dues to the bank.
c)
All corporate SMEs, which have funded and non-funded outstanding up to Rs.10
crore under multiple/ consortium banking arrangement.
d)
Accounts involving wilful default, fraud and malfeasance will not be eligible
for restructuring under these guidelines.
e)
Accounts classified by banks as "Loss Assets" will not be
eligible
for restructuring. For
all corporate SMEs, which have funded and non-funded outstanding of Rs.10
crore and above, Department of Banking Operations & Development has issued
separate guidelines vide circular DBOD. No.BP. BC.45/ 21.04. 132/2005-06 dated
November 10, 2005. | |
10.
Cluster Approach 60
clusters have been identified by the Ministry of SSI, Government of India for
focused development of Small Enterprises sector. All SLBC Convenor banks have
been advised to incorporate in their Annual Credit Plans, the credit requirement
in the clusters identified by the Ministry of SSI, Government of India. As
per Ganguly Committee recommendations banks have been advised that a full-service
approach to cater to the diverse needs of the SSI sector may be achieved through
extending banking services to recognized SME clusters by adopting a 4-C approach
namely, Customer focus, Cost control, Cross sell and Contain risk. A cluster based
approach to lending may be more beneficial: (ii)
in dealing with well-defined and recognized groups;
(ii)
availability of appropriate information for risk assessment and
(iii)
monitoring by the lending institutions. Clusters
may be identified based on factors such as trade record, competitiveness and growth
prospects and/or other cluster specific data. |
11.
Committees on flow of Credit to SSI/SME sector
11.1Report
of the Committee to Examine the Adequacy of Institutional Credit to SSI Sector
and Related Aspects (Nayak Committee) The
Committee was constituted by Reserve Bank of India in December 1991 under the
Chairmanship of Shri P. R. Nayak, the then Deputy Governor to examine the issues
confronting SSIs in the matter of obtaining finance. The Committee submitted its
report in 1992. All the major recommendations of the Committee have been accepted
and the banks have been inter-alia advised to: i)
give preference to village industries, tiny industries and other small scale units
in that order, while meeting the credit requirements of the small scale sector;
ii)
grant working capital credit limits to SSI units computed on the basis of minimum
20% of their estimated annual turnover whose credit limit in individual cases
is upto Rs.2 crore [ since raised to Rs.5 crore ];
iii)
prepare annual credit budget on the `bottom-up’ basis to ensure that the legitimate
requirements of SSI sector are met in full;
iv)
extend ‘Single Window Scheme’ of SIDBI to all districts to meet the financial
requirements (both working capital and term loan) of SSIs;
v)
ensure that there should not be any delay in sanctioning and disbursal of credit.
In case of rejection/curtailment of credit limit of the loan proposal, a reference
to higher authorities should be made;
vi)
not to insist on compulsory deposit as a `quid pro-quo’ for sanctioning the credit;
vii)
open specialised SSI bank branches or convert those branches which have a fairly
large number of SSI borrowal accounts, into specialised SSI branches;
viii)
identify sick SSI units and take urgent action to put them on nursing programmes;
ix)
standardise loan application forms for SSI borrowers; and
x)
impart training to staff working at specialised branches to bring about attitudinal
change in them. 11.2
Report of the High Level Committee on Credit to SSI (Kapur Committee) Reserve
Bank of India had appointed a one-man High Level Committee headed by Shri S.L.
Kapur, (IAS, Retd.), Former Secretary, Government of India, Ministry of Industry
to suggest measures for improving the delivery system and simplification of procedures
for credit to SSI sector.The
Committee made 126 recommendations covering wide range of areas pertaining to
financing of SSI sector. These recommendations have been examined by the RBI and
it has been decided to accept 88 recommendations which include the following important
recommendations: i)
Delegation of more powers to branch managers to grant ad-hoc limits;
ii)
Simplification of application forms;
iii)
Freedom to banks to decide their own norms for assessment of credit requirements;
iv)
Opening of more specialised SSI branches;
v)
Enhancement in the limit for composite loans to Rs. 5 lakh.(since enhanced
to Rs.1 crore);
vi)
Strengthening the recovery mechanism;
vi)
Banks to pay more attention to the backward states;
viii)
Special programmes for training branch managers for appraising small projects;
ix)
Banks to make customers grievance machinery more transparent and simplify the
procedures for handling complaints and monitoring thereof. 11.3
Report of the Working Group on Flow of Credit to SSI Sector (Ganguly Committee)
As per the
announcement made by the Governor, Reserve Bank of India, in the Mid-Term Review
of the Monetary and Credit Policy 2003-2004, a "Working Group on Flow of
Credit to SSI sector" was constituted under the Chairmanship of Dr.A.S.Ganguly The
Committee made 31 recommendations covering wide range of areas pertaining to financing
of SSI sector. The recommendations pertaining to RBI and banks have been examined
and has accepted 8 recommendations so far and commended to banks for implementation
which are as under: i)
adoption of cluster based approach for financing SME sector; ii)
sponsoring specific projects as well as widely publicising successful working
models of NGOs by Lead Banks which service small and tiny industries and individual
entrepreneurs; iii)
sanctioning of higher working capital limits by banks operating in the North East
region to SSIs, based on their commercial judgement due to the peculiar situation
of hilly terrain and frequent floods causing hindrance in the transportation system; iv)
exploring new instruments by banks for promoting rural industry and to improve
the flow of credit to rural artisans, rural industries and rural entrepreneurs,
and v) revision
of tenure as also interest rate structure of deposits kept by foreign banks with
SIDBI for their shortfall in priority sector lending. 4.
Internal Group to Review Guidelines on Credit Flow to SME SectorAn
Internal Group was constituted under the Chairmanship of Shri C.S.Murthy, CGM-in-Charge,
RPCD, Central Office, Reserve Bank of India, to inter-alia review all circulars
and guidelines issued by Reserve Bank in the past regarding financing of SSIs,
to suggest appropriate terms for restructuring of the borrowal accounts of SSI/Medium
Enterprises and also to examine the guidelines issued by Reserve Bank for nursing
sick SSIs and suggest suitable relaxation and liberalization of these norms.The
Group has submitted its report on June 6, 2005 The
internal group has recommended: (i)
Constitution of empowered committees at the regional office of Reserve Bank to
periodically review the progress in SSI and Medium Enterprises financing and also
to coordinate with other banks/financial institutions and the state government
in removing bottlenecks, if any, to ensure smooth flow of credit to the sector.
(ii)
Opening of specialised SME branches in identified clusters/centres with preponderance
of SSI and ME units to enable the entrepreneurs to have easy access to the bank
credit and to equip bank personnel to develop the requisite expertise. (iii)
The group has proposed to empower the boards of banks to formulate policies relating
to restructuring of accounts of SME units subject to certain guidelines. Restructuring
of accounts of corporate SSI/ME borrowers having credit limits aggregating Rs.10
crore or more under multiple banking arrangements will be covered under the revised
CDR mechanism. (iv)
While recommending continuation of the extant guidelines on definition of a sick
SSI unit, the group has recommended that all other instructions relating to viability
and parameters for relief and concessions to be provided to sick SSI units, as
prescribed by the Reserve Bank be withdrawn and banks be given freedom to lay
down their own guidelines with the approval of their Board of Directors. Majority
of the recommendations of the Group have been accepted by the Government of India
and incorporated as part of policy package announced by the Union Finance Minister
for stepping up credit to SME sector. 12.
Policy Package for Stepping up Credit to Small and Medium Enterprises- Announced
by the Union Finance Minister Based
on the policy package announced by the Union Finance Minister for stepping up
credit to small and medium enterprises, two circulars have been issued separately
to public sector banks (RPCD.PLNFS. BC.No.31/ 06.02.31/200506 dated August 19,
2005) and private, foreign banks and RRBs (RPCD.PLNFS. BC.No.35/ 06.02.31 / 2005
-06 dated August 25, 2005) for implementation. Some of the salient features of
the policy package are: - Definition
of Small and Medium Enterprises (SMEs)
- Fixing
of self-targets for financing to SME sector by banks
- Measures
to rationalize the cost of loans to SME sector
- Measures
to increase the outreach of formal credit to the SME sector
- Cluster
based approach for financing SME sector
- Constitution
of Empowered Committees for SMEs in the Regional Offices of Reserve Bank
- Steps
to rationalize the cost of loans to SME sector by adopting a transparent rating
system with cost of credit being linked to the credit rating of enterprise.
- Banks
to consider taking advantage of Credit Appraisal & Rating Tool (CART), Risk
Assessment Model (RAM) and the comprehensive rating model for risk assessment
of SME proposals, developed by SIDBI for reduction of their transaction costs.
- Banks
to consider the ratings of SSI units carried out through reputed credit rating
agencies under the Credit Rating Scheme introduced by National Small Industries
Corporation.
- Wider
dissemination and easy accessibility of the policy guidelines formulated by Boards
of banks as well as instructions/guidelines issued by Reserve Bank by displaying
them on the respective banks’ web sites as well as web site of SIDBI and also
prominently displaying them at the bank branches.
A
copy of the "Policy Package for stepping up Credit to SME Sector", announced
by the Union Finance Minister in the Parliament on August 10, 2005 is furnished
in Annexure IV. 13.
Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 The
Government of India has enacted the Micro, Small and Medium Enterprises Development
(MSMED) Act, 2006 on June 16, 2006 which was notified on October 2, 2006. Consistent
with the notification of the Micro, Small and Medium Enterprises Development (MSMED)
Act 2006, the definition of micro, small and medium enterprises engaged in manufacturing
or production and providing or rendering of services has been modified and is
required to be implemented by the banks alongwith other policy measures with immediate
effect as advised vide circular RPCD.PLNFS.BC.No.63/06.02.31/2006-07
dated April 4, 2007.
Annexure
I MINISTRY
OF SMALL SCALE INDUSTRIES
NOTIFICATION New
Delhi, the 5th October, 2006 S.O.
1722(E) – In exercise of the powers conferred by sub-section (1) of 2006) herein
referred to as the said Act, the Central Government specifies the following items,
the cost of which shall be excluded while calculating the investment in plant
and machinery in the case of the enterprises mentioned in Section 7(1)(a) of the
said Act, namely: (i)
equipment such as tools, jigs, dyes, moulds and spare parts for maintenance and
the cost of consumables stores;
(ii)
installation of plant and machinery;
(iii)
research and development equipment and pollution controlled equipment
(iv)
power generation set and extra transformer installed by the enterprise as per
regulations of the State Electricity Board;
(v)
bank charges and service charges paid to the National Small Industries Corporation
or the State Small Industries Corporation;
(vi)
procurement or installation of cables, wiring, bus bars, electrical control panels
(not mounded on individual machines), oil circuit breakers or miniature circuit
breakers which are necessarily to be used for providing electrical power to the
plant and machinery or for safety measures;
(vii)
gas producers plants;
(viii)
transportation charges ( excluding sales-tax or value added tax and excise duty)
for indigenous machinery from the place of the manufacture to the site of the
enterprise;
(ix)
charges paid for technical know-how for erection of plant and machinery;
(x)
such storage tanks which store raw material and finished produces and are not
linked with the manufacturing process; and
(xi)
fire fighting equipment. 2.
While calculating the investment in plant and machinery refer to paragraph 1,
the original price thereof, irrespective of whether the plant and machinery are
new or second handed, shall be taken into account provided that in the case of
imported machinery, the following shall be included in calculating the value,
namely; (i) Import
duty (excluding miscellaneous expenses such as transportation from the port to
the site of the factory, demurrage paid at the port);
(ii)
Shipping charges;
(iii)
Customs clearance charges; and
(iv)
Sales tax or value added tax. (F.No.4(1)/2006-MSME-
Policy)
JAWHAR SIRCAR,
Addl. Secy.
Annexure II LIST
OF SME CLUSTERS COVERED BY EXISTING SIDBI
BRANCHES
| Sr.
No. |
Branch
Offices |
No.of
SSI clusters |
Product |
| 1
|
Hyderabad |
5 |
Ceiling
Fan, Electronic Goods, Pharmaceuticals- Bulk Drugs, Hand Pump sets & Foundry |
| 2
|
Patna |
1 |
Brass
and German Utensils | |
3
|
Delhi |
19 |
Stainless
Steel Utensils & Cutlery, Chemicals, Electrical Engineering Equipment, Electronic
Goods, Food Products, Leather Products, Mechanical Engineering Equipment, Packaging
Material, Paper Products, Plastic Products, Wire Drawing, Metal Fabrication, Furniture,
Electro Plating, Auto Components, Hosiery, Readymade Garments, Sanitary Fittings
| |
4
|
Ahmedabad |
17 |
Pharmaceuticals, Dyes & Intermediates, Moulded Plastic Products, Readymade
Garments, Textile Machinery Parts, Diamond Processing, Machine Tools, Castings
& Forging, Steel Utensils, Wood Product & Furniture, Paper Products, Leather
Footwear, Washing Powder & Soap, Marble Slabs, Power Driven Pumps, Electronic
Goods, Auto Parts | |
5 |
Surat |
4 |
Diamond
Processing, Powerloom, Wood Product & Furniture, Textile Machinery |
| 6 |
Baroda |
3 |
Pharmaceutical-
Bulk drugs, Plastic processing & Wood product & furniture |
| 7 |
Goa |
1 |
Pharmaceutical |
| 8 |
Faridabad |
3 |
Auto
components, Engineering Cluster, Stone Crushing | |
9 |
Gurgaon |
5 |
Auto
Components, Electronic Goods, Electrical Engineering Equipment, Readymade Garments,
Mechanical Engineering Equipment | |
10 |
Parwanoo(Baddi) |
1 |
Engineering
Equipment | |
11 |
Jammu |
3 |
Steel
Re-rolling, Oil mills, Rice Mills | |
12 |
Jamshedpur |
1 |
Engineering
& Fabrication | |
13 |
Bangalore |
6 |
Powerloom,
Electronic goods, Readymade garments, Light engineering, Leather products |
| 14 |
Kochi/Ernakulam |
3 |
Rubber
products, Powerlooms & Sea Food processing | |
15 |
Aurangabad |
2 |
Auto
components & Pharmaceuticals- Bulk drugs | |
16 |
Mumbai |
11 |
Electronic
Goods , Pharmaceutical-Basic drugs, Toys (plastic), Ready made garments, Hosiery,
Machine Tools, Engineering equipment, Chemicals, Packaging material, Handtools,
Plastic products | |
17 |
Nagpur |
6 |
Powerlooms,
Engineering & Fabrication, Steel furniture, Ready made garments, Handtools,
Food processing | |
18 |
Pune |
6 |
Auto
components, Electronic goods, Food products, Ready made Garments, Pharmaceuticals
–Bulk Drugs, Fibre glass | |
19 |
Thane |
2 |
Pharmaceuticals
–Bulk Drugs & Sea food | |
20 |
Bhopal |
1 |
Engineering
equipment | |
21 |
Indore |
4 |
Pharmaceuticals-
Bulk drugs, Readymade garments, food processing, Auto components |
| 22 |
Ludhana |
9 |
Auto
Components, Bicycle Parts, Hosiery, Sewing M/C Components, Industrial Fastners,
Handtools, Machine tools, Forging, Electroplating | |
23 |
Jaipur |
7 |
Gems
& Jewellery, Ball Bearing, Electrical Engineering Equipment, Food Products,
Garments, Lime, Mechanical Engineering Equipment | |
24 |
Chennai |
3 |
Auto
components, Leather products, Electroplating | |
25 |
Coimbatore |
6 |
Diesel
Engines, Agricultural Implements, Machine Tools, Castings & Forging, Powerloom,
Wet Grinding Machines | |
26 |
Tirupur |
1 |
Hosiery |
| 27 |
Noida/Gaziabad |
10 |
Electronic
goods, Toys, Chemicals, Electrical engineering equipment, Garments, Mechanical
engineering equipment, Packaging material, Plastic products, Chemicals |
| 28 |
Kanpur |
3 |
Saddlery,
Cotton hosiery, Leather products | |
29 |
Varanasi |
4 |
Sheetwork
(Globe Lamp), Powerloom, Agriculture implements, Electric fan |
| 30 |
Dehradun |
1 |
Miniature
Vacuum bulb | |
31 |
Nashik
(shortly to be opened) |
1 |
Steel
furniture | |
Total |
149 | |
Annexure
III
| List
of SME Clusters in India (identified by UNIDO) | |
S.
No. |
State |
District |
Location |
Product |
| 1
| Andhra
Pradesh |
Anantpur
| Rayadurg
| Readymade
Garments | |
2
| Andhra
Pradesh |
Anantpur
| Chitradurg
| Jeans
Garments | |
3
| Andhra
Pradesh |
Chittoor
| Nagari
| Powerloom
| |
4
| Andhra
Pradesh |
Chittoor
| Ventimalta,
Srikalahasti, Chundur |
Brass
Utensils | |
5
| Andhra
Pradesh |
East
Godavari |
East
Godavari |
Rice
Mills | |
6
| Andhra
Pradesh |
East
Godavari |
Rajahmundry
| Graphite
Crucibles | |
7
| Andhra
Pradesh |
East
Godavari |
East
Godavari |
Coir
& Coir Products | |
8
| Andhra
Pradesh |
East
Godavari |
Rajahmundry
| Aluminium
Utensils | |
9
| Andhra
Pradesh |
East
Godavari & West Godavari |
East
Godavari(EG) & West Godavari |
Refractory
Products | |
10
| Andhra
Pradesh |
Guntur
| Guntur
| Powerloom
| |
11
| Andhra
Pradesh |
Guntur
| Guntur
| Lime
Calcination | |
12
| Andhra
Pradesh |
Guntur
| Macherla
| Wooden
Furniture | |
13
| Andhra
Pradesh |
Hyderabad
| Hyderabad
| Ceilling
Fan | |
14
| Andhra
Pradesh |
Hyderabad
| Hyderabad
| Electronic
Goods | |
15
| Andhra
Pradesh |
Hyderabad
| Hyderabad
| Pharmaceuticals-
Bulk Drugs | |
16
| Andhra
Pradesh |
Hyderabad
| Musheerabad
| Leather
Tanning | |
17
| Andhra
Pradesh |
Hyderabad
| Hyderabad
| Hand
Pumpsets | |
18
| Andhra
Pradesh |
Hyderabad
| Hyderabad
| Foundry
| |
19
| Andhra
Pradesh |
Karimnagar
| Sirsilla
| Powerloom
| |
20
| Andhra
Pradesh |
Krishna
| Machilipatnam
| Gold
Plating & Imitation Jewellery | |
21
| Andhra
Pradesh |
Krishna
| Vijayawada
| Rice
Mills | |
22
| Andhra
Pradesh |
Krishna
| Chundur,
Kavadiguda, Charminar,Vijayawada |
Steel
Furniture | |
23
| Andhra
Pradesh |
Kurnool
| Adoni
| Oil
Mills | |
24
| Andhra
Pradesh |
Kurnool
| Kurnool
| Artificial
Diamonds | |
25
| Andhra
Pradesh |
Kurnool,
Cuddapah |
Kurnool(Banaganapalle,
Bethamcheria,Kolimigundla)Cuddapah |
Polished
Slabs | |
26
| Andhra
Pradesh |
Prakasam
| Markapuram
| Stone
Slate | |
27
| Andhra
Pradesh |
Ranga
Reddy | Balanagar,
Jeedimetla & Kukatpally |
Machine
Tools | |
28
| Andhra
Pradesh |
Srikakulam
| Palasa
| Cashew
Processing | |
29
| Andhra
Pradesh |
Visakhapatnam,East
Godavari |
Visakhapatnam,
Kakinada |
Marine
Foods | |
30
| Andhra
Pradesh |
Warangal
| Warangal
| Powerloom
| |
31
| Andhra
Pradesh |
Warangal
| Warangal
| Brassware
| |
32
| Andhra
Pradesh |
West
Godavari |
West
Godavari |
Rice
Mills | |
33
| Bihar
| Begusarai
| Barauni
| Engineering
& Fabrication | |
34
| Bihar
| Muzzafarpur
| Muzzafarpur
| Food
Products | |
35
| Bihar
| Patna
| Patna
| Brass
and German Silver Utensils | |
36
| Chhattisgarh
| Durg,
Rajnandgaon, Raipur |
Durg,
Rajnandgaon, Raipur |
Steel
Re-rolling | |
37
| Chhattisgarh
| Durg,
Raipur |
Durg,
Raipur |
Castings
& Metal Fabrication | |
38
| Delhi
| North
West Delhi |
Wazirpur,
Badli | Stainless
Steel Utensils & Cutlery | |
39
| Delhi
| South
& West Delhi |
Okhla,
Mayapuri |
Chemicals
| |
40
| Delhi
| West
& South |
Naraina
& Okhla |
Electrical
Engineering Equipment | |
41
| Delhi
| West
& South |
Naraina
& Okhla |
Electronic
Goods | |
42
| Delhi
| North
Delhi | Lawrence
Road | Food
Products | |
43
| Delhi
| South
Delhi | Okhla,
Wazirpur Flatted Factories Complex |
Leather
Products | |
44
| Delhi
| South,
West Delhi |
Okhla,Mayapuri,
Anand Parbat |
Mechanical
Engineering Equipment | |
45
| Delhi
| West,South,
East Delhi |
Naraina,Okhla,
Patparganj |
Packaging
Material | |
46
| Delhi
| West
& South |
Naraina
& Okhla |
Paper
Products | |
47
| Delhi
| West
& South |
Naraina
Udyog Nagar & Okhla |
Plastic
Products | |
48
| Delhi
| West,
South, North West |
Naraina,Okhla,Shivaji
Marg,Najafgarh Road |
Rubber
Products | |
49
| Delhi
| North
East Delhi |
Shahadara
& Vishwasnagar |
Wire
Drawing | |
50
| Delhi
| West
& North West |
Mayapuri
& Wazirpur |
Metal
Fabrication | |
51
| Delhi
| West
& North East |
Kirtinagar
& Tilak Nagar |
Furniture
| |
52
| Delhi
| North
West Delhi |
Wazirpur
| Electro
Plating | |
53
| Delhi
| South,West,North
West & North West |
Okhla,
Mayapuri,Naraina, Wazirpur Badli & G.T. Karnal Road |
Auto
Components | |
54
| Delhi
| North
East Delhi, East Delhi & South |
Shahdara,Gandhinagar,
Okhla & Maidangari |
Hosiery
| |
55
| Delhi
| South
& North East |
Okhla
& Shahdara |
Readymade
Garments | |
56
| Delhi
| South
Delhi | Okhla
| Sanitary
Fittings | |
57
| Gujarat
| Ahmedabad
| Ahmedabad
| Pharmaceuticals
| |
58
| Gujarat
| Ahmedabad
| Ahmedabad
| Dyes
& Intermediates | |
59
| Gujarat
| Ahmedabad
| Ahmedabad
| Moulded
Plastic Products | |
60
| Gujarat
| Ahmedabad
| Ahmedabad
| Readymade
Garments | |
61
| Gujarat
| Ahmedabad
| Ahmedabad
| Textile
Machinery Parts | |
62
| Gujarat
| Ahmedabad
| Ahmedabad,
Dhanduka |
Diamond
Processing | |
63
| Gujarat
| Ahmedabad
| Ahmedabad
| Machine
Tools | |
64
| Gujarat
| Ahmedabad
| Ahmedabad
| Castings
& Forging | |
65
| Gujarat
| Ahmedabad
| Ahmedabad
| Steel
Utensils | |
66
| Gujarat
| Ahmedabad
| Ahmedabad
| Wood
Product & Furniture | |
67
| Gujarat
| Ahmedabad
| Ahmedabad
| Paper
Products | |
68
| Gujarat
| Ahmedabad
| Ahmedabad
| Leather
Footware | |
69
| Gujarat
| Ahmedabad
| Ahmedabad
| Washing
Powder & Soap | |
70
| Gujarat
| Ahmedabad
| Ahmedabad
| Marble
Slabs | |
71
| Gujarat
| Ahmedabad
| Ahmedabad
| Power
Driven Pumps | |
72
| Gujarat
| Ahmedabad
| Ahmedabad
| Electronic
Goods | |
73
| Gujarat
| Ahmedabad
| Ahmedabad
| Auto
Parts | |
74
| Gujarat
| Amreli
| Savarkundla
| Weights
& Measures | |
75
| Gujarat
| Amrelli,
Juna Garh, Rajkot |
Amrelli
Juna Garh Rajkot belt |
Oil
Mills Machinery | |
76
| Gujarat
| Bhavnagar
| Alang
| Ship
Breaking | |
77
| Gujarat
| Bhavnagar
| Bhavnagar
| Steel
Re-rolling | |
78
| Gujarat
| Bhavnagar
| Bhavnagar
| Machine
Tools | |
79
| Gujarat
| Bhavnagar
| Bhavnagar
| Plastic
Processing | |
80
| Gujarat
| Bhavnagar
| Bhavnagar
| Diamond
Processing | |
81
| Gujarat
| Gandhinagar
| Kalol
| Powerloom
| |
82
| Gujarat
| Jamnagar
| Jamnagar
| Brass
Parts | |
83
| Gujarat
| Jamnagar
| Jamnagar
| Wood
Product & Furniture | |
84
| Gujarat
| Mahesana
| Vijapur
| Cotton
Cloth Weaving | |
85
| Gujarat
| Rajkot
| Dhoraji,
Gondal, Rajkot |
Oil
Mills | |
86
| Gujarat
| Rajkot
| Jetpur
| Textile
Printing | |
87
| Gujarat
| Rajkot
| Morvi
& Wankaner |
Flooring
Tiles(Clay) | |
88
| Gujarat
| Rajkot
| Morvi
| Wall
Clocks | |
89
| Gujarat
| Rajkot
| Rajkot
| Diesel
Engines | |
90
| Gujarat
| Rajkot
| Rajkot
| Electric
Motors | |
91
| Gujarat
| Rajkot
| Rajkot
| Castings
& Forging | |
92
| Gujarat
| Rajkot
| Rajkot
| Machine
Tools | |
93
| Gujarat
| Rajkot
| Rajkot
| Diamond
Processing | |
94
| Gujarat
| Surat
| Surat,
Choryasi |
Diamond
Processing | |
95
| Gujarat
| Surat
| Surat
| Powerloom
| |
96
| Gujarat
| Surat
| Surat
| Wood
Product & Furniture | |
97
| Gujarat
| Surat
| Surat
| Textile
Machinery | |
98
| Gujarat
| Surendranagar
| Surendranagar
& Thangadh |
Ceramics
| |
99
| Gujarat
| Surendranagar
| Chotila
| Sanitary
Fittings | |
100
| Gujarat
| Vadodara
| Vadodara
| Pharmaceuticals-
Bulk Drugs | |
101
| Gujarat
| Vadodara
| Vadodara
| Plastic
Processing | |
102
| Gujarat
| Vadodara
| Vadodara
| Wood
Product & Furniture | |
103
| Gujarat
| Valsad
| Pardi
| Dyes
& Intermediates | |
104
| Gujarat
| Valsad/Bharuch
| Vapi/Ankleshwar
| Chemicals
| |
105
| Gujarat
| Valsad/Bharuch
| Vapi/Ankleshwar
| Pharmaceuticals-
Bulk Drugs | |
106
| Goa
| South
Goa | Margao
| Pharmaceutical
| |
107
| Haryana
| Ambala
| Ambala
| Mixies
& Grinders | |
108
| Haryana
| Ambala
| Ambala
| Scientific
Instruments | |
109
| Haryana
| Bhiwani
| Bhiwani
| Powerloom
| |
110
| Haryana
| Bhiwani
| Bhiwani
| Stone
Crushing | |
111
| Haryana
| Faridabad
| Faridabad
| Auto
Components | |
112
| Haryana
| Faridabad
| Faridabad
| Engineering
Cluster | |
113
| Haryana
| Faridabad
| Faridabad
| Stone
Crushing | |
114
| Haryana
| Gurgaon
| Gurgaon
| Auto
Components | |
115
| Haryana
| Gurgaon
| Gurgaon
| Electronic
Goods | |
116
| Haryana
| Gurgaon
| Gurgaon
| Electrical
Engineering Equipment | |
117
| Haryana
| Gurgaon
| Gurgaon
| Readymade
Garments | |
118
| Haryana
| Gurgaon
| Gurgaon
| Mechanical
Engineering Equipment | |
119
| Haryana
| Kaithal
| Kaithal
| Rice
Mills | |
120
| Haryana
| Karnal
| Karnal
| Agricultural
Implements | |
121
| Haryana
| Karnal,
Kurukshetra,Panipat |
Karnal,Kurukshetra,Panipat
| Rice
Mills | |
122
| Haryana
| Panchkula
| Pinjore
| Engineering
Equipment | |
123
| Haryana
| Panchkula
| Panchkula
| Stone
Crushing | |
124
| Haryana
| Panipat
| Panipat
| Powerloom
| |
125
| Haryana
| Panipat
| Panipat
| Shoddy
Yarn | |
126
| Haryana
| Panipat
| Samalkha
| Foundry
| |
127
| Haryana
| Panipat
| Panipat
| Cotton
Spinning | |
128
| Haryana
| Rohtak
| Rohtak
| Nuts/
Bolts | |
129
| Haryana
| Yamuna
Nagar | Yamuna
Nagar | Plywood/Board/Blackboard
| |
130
| Haryana
| Yamunanagar
| Jagadhri
| Utensils
| |
131
| Himachal
Pradesh |
Kullu
& Sirmaur |
Kullu
& Sirmaur |
Food
Processing | |
132
| Himachal
Pradesh |
Kangra
| Damtal
| Stone
Crushing | |
133
| Himachal
Pradesh |
Solan
| Parwanoo
| Engineering
Equipment | |
134
| Jammu
& Kashmir |
Anantnag
| Anantnag
| Cricket
Bat | |
135
| Jammu
& Kashmir |
Jammu
| Jammu
| Steel
Re-rolling | |
136
| Jammu
& Kashmir |
Jammu/
Kathua |
Jammu/
Kathua |
Oil
Mills | |
137
| Jammu
& Kashmir |
Jammu/
Kathua |
Jammu/
Kathua |
Rice
Mills | |
138
| Jammu
& Kashmir |
Srinagar
| Srinagar
| Timber
Joinery/ Furniture | |
139
| Jharkhand
| Sarikela-Kharsawan
| Adityapur
| Auto
Components | |
140
| Jharkhand
| East
Singhbhum |
Jamshedpur
| Engineering
& Fabrication | |
141
| Jharkhand
| Bokaro
| Bokaro
| Engineering
& Fabrication | |
142
| Karnataka
| Bangalore
| Bangalore
| Machine
Tools | |
143
| Karnataka
| Bangalore
| Bangalore
| Powerloom
| |
144
| Karnataka
| Bangalore
| Bangalore
| Electronic
Goods | |
145
| Karnataka
| Bangalore
| Bangalore
| Readymade
Garments | |
146
| Karnataka
| Bangalore
| Bangalore
| Light
Engineering | |
147
| Karnataka
| Bangalore
| Bangalore
| Leather
Products | |
148
| Karnataka
| Belgaum
| Belgaum
| Foundry
| |
149
| Karnataka
| Belgaum
| Belgaum
| Powerloom
| |
150
| Karnataka
| Bellary
| Bellary
| Jeans
Garments | |
151
| Karnataka
| Bijapur
| Bijapur
| Oil
Mills | |
152
| Karnataka
| Dharwad
| Hubli,
Dharwad |
Agriculture
Implements and Tractor Trailer | |
153
| Karnataka
| Gadag
| Gadag
Betgeri |
Powerloom
| |
154
| Karnataka
| Gulburga
| Gulburga
Gadagh belt |
Dal
Mills | |
155
| Karnataka
| Hassan
| Arasikara
| Coir
& Coir Products | |
156
| Karnataka
| Mysore
| Mysore
| Food
Products | |
157
| Karnataka
| Mysore
| Mysore
| Silk
| |
158
| Karnataka
| Raichur
| Raichur
| Leather
Products | |
159
| Karnataka
| Shimoga
| Shimoga
| Rice
Mills | |
160
| Karnataka
| South
Kannada |
Mangalore
| Food
Products | |
161
| Kerala
| Alappuzha
| Alappuzha
| Coir
& Coir Products | |
162
| Kerala
| Ernakulam
| Ernakulam
| Rubber
Products | |
163
| Kerala
| Ernakulam
| Ernakulam
| Powerloom
| |
164
| Kerala
| Ernakulam
| Kochi
| Sea
Food Processing | |
165
| Kerala
| Kannur
| Kannur
| Powerloom
| |
166
| Kerala
| Kollam
| Kollam
| Coir
& Coir Products | |
167
| Kerala
| Kottayam
| Kottayam
| Rubber
Products | |
168
| Kerala
| Mallappuram
| Mallappuram
| Powerloom
| |
169
| Kerala
| Palakkad
| Palakkad
| Powerloom
| |
170
| Kerala
|
| Faizlure
| Powerloom
| |
171
| Maharashtra
| Ahmednagar
| Ahmednagar
| Auto
Components | |
172
| Maharashtra
| Akola
| Akola
| Oil
Mills (Cotton seed) | |
173
| Maharashtra
| Akola
| Akola
| Dal
Mills | |
174
| Maharashtra
| Aurangabad
| Aurangabad
| Auto
Components | |
175
| Maharashtra
| Aurangabad
| Aurangabad
| Pharmaceuticals-
Bulk Drugs | |
176
| Maharashtra
| Bhandara
| Bhandara
| Rice
Mills | |
177
| Maharashtra
| Chandrapur
| Chandrapur
| Roofing
Tiles | |
178
| Maharashtra
| Chandrapur
| Chandrapur
| Rice
Mills | |
179
| Maharashtra
| Dhule
| Dhule
| Chilly
Powder | |
180
| Maharashtra
| Gadchiroli
| Gadchiroli
| Castings
& Forging | |
181
| Maharashtra
| Gadchiroli
| Gadchiroli
| Rice
Mills | |
182
| Maharashtra
| Gondia
| Gondiya
| Rice
Mills | |
183
| Maharashtra
| Jalgaon
| Jalgaon
| Dal
Mills | |
184
| Maharashtra
| Jalgaon
| Jalgaon
| Agriculture
Implements | |
185
| Maharashtra
| Jalna
| Jalna
| Engineering
Equipment | |
186
| Maharashtra
| Kolhapur
| Kolhapur
| Diesel
Engines | |
187
| Maharashtra
| Kolhapur
| Kolhapur
| Foundry
| |
188
| Maharashtra
| Kolhapur
| Ichalkaranji
| Powerloom
| |
189
| Maharashtra
| Mumbai
| Mumbai
| Electronic
Goods | |
190
| Maharashtra
| Mumbai
| Mumbai
| Pharmaceutical
- Basic Drugs | |
191
| Maharashtra
| Mumbai
| Mumbai
| Toys
(Plastic) | |
192
| Maharashtra
| Mumbai
| Mumbai
| Readymade
Garments | |
193
| Maharashtra
| Mumbai
| Mumbai
| Hosiery
| |
194
| Maharashtra
| Mumbai
| Mumbai
| Machine
Tools | |
195
| Maharashtra
| Mumbai
| Mumbai
| Engineering
Equipment | |
196
| Maharashtra
| Mumbai
| Mumbai
| Chemicals
| |
197
| Maharashtra
| Mumbai
| Mumbai
| Packaging
Material | |
198
| Maharashtra
| Mumbai
| Mumbai
| Handtools
| |
199
| Maharashtra
| Mumbai
| Mumbai
| Plastic
Products | |
200
| Maharashtra
| Nagpur
| Nagpur
| Powerloom
| |
201
| Maharashtra
| Nagpur
| Nagpur
| Engineering
& Fabrication | |
202
| Maharashtra
| Nagpur
| Nagpur
| Steel
Furniture | |
203
| Maharashtra
| Nagpur
| Nagpur(Butibori)
| Readymade
Garments | |
204
| Maharashtra
| Nagpur
| Nagpur
| Handtools
| |
205
| Maharashtra
| Nagpur
| Nagpur
| Food
Processing | |
206
| Maharashtra
| Nanded
| Nanded
| Dal
Mills | |
207
| Maharashtra
| Nashik
| Malegaon
| Powerloom
| |
208
| Maharashtra
| Nashik
| Nashik
| Steel
Furniture | |
209
| Maharashtra
| Pune
| Pune
| Auto
Components | |
210
| Maharashtra
| Pune
| Pune
| Electronic
Goods | |
211
| Maharashtra
| Pune
| Pune
| Food
Products | |
212
| Maharashtra
| Pune
| Pune
| Readymade
Garments | |
213
| Maharashtra
| Pune
| Pune
| Pharmaceuticals-
Bulk Drugs | |
214
| Maharashtra
| Pune
| Pune
| Fibre
Glass | |
215
| Maharashtra
| Ratnagiri
| Ratnagiri
| Canned
& Processed Fish | |
216
| Maharashtra
| Sangli
| Sangli
| M
S Rods | |
217
| Maharashtra
| Sangli
| Madhavanagar
| Powerloom
| |
218
| Maharashtra
| Satara
| Satara
| Leather
Tanning | |
219
| Maharashtra
| Sholapur
| Sholapur
| Powerloom
| |
220
| Maharashtra
| Sindhudurg
| Sindhudurg
| Cashew
Processing | |
221
| Maharashtra
| Sindhudurg
| Sindhudurg
| Copper
Coated Wires | |
222
| Maharashtra
| Thane
| Bhiwandi
| Powerloom
| |
223
| Maharashtra
| Thane
| Kalyan
| Confectionery
| |
224
| Maharashtra
| Thane
| Vashind
| Chemicals
| |
225
| Maharashtra
| Thane
| Tarapur,
Thane-Belapur |
Pharmaceuticals-
Bulk Drugs | |
226
| Maharashtra
| Thane
| Thane
| Sea
Food | |
227
| Maharashtra
| Wardha
| Wardha
| Solvent
Oil | |
228
| Maharashtra
| Yavatmal
| Yavatmal
| Dal
Mills | |
229
| Madhya
Pradesh |
Bhopal
| Bhopal
| Engineering
Equipment | |
230
| Madhya
Pradesh |
Dewas
| Dewas
| Electrical
Goods | |
231
| Madhya
Pradesh |
East
Nimar | Burhanpur
| Powerloom
| |
232
| Madhya
Pradesh |
Indore
| Indore
| Pharmaceuticals-Bulk
Drugs | |
233
| Madhya
Pradesh |
Indore
| Indore
| Readymade
Garments | |
234
| Madhya
Pradesh |
Indore
| Indore
| Food
Processing | |
235
| Madhya
Pradesh |
Indore
| Pithampur
| Auto
Components | |
236
| Madhya
Pradesh |
Jabalpur
| Jabalpur
| Readymade
Garments | |
237
| Madhya
Pradesh |
Jabalpur
| Jabalpur
| Powerloom
| |
238
| Madhya
Pradesh |
Ujjain
| Ujjain
| Powerloom
| |
239
| Orissa
| Balangir
| Balangir
| Rice
Mills | |
240
| Orissa
| Balasore
| Balasore
| Rice
Mills | |
241
| Orissa
| Balasore
| Balasore
| Powerloom
| |
242
| Orissa
| Cuttack
| Cuttack
| Rice
Mills | |
243
| Orissa
| Cuttack
| Cuttack
| Chemicals
& Pharmaceuticals | |
244
| Orissa
| Cuttack
| Cuttack(Jagatpur)
| Engineering
& Fabrication | |
245
| Orissa
| Cuttack
| Cuttack
| Spices
| |
246
| Orissa
| Dhenkanal
| Dhenkanal
| Powerloom
| |
247
| Orissa
| Ganjam
| Ganjam
| Powerloom
| |
248
| Orissa
| Ganjam
| Ganjam
| Rice
Mills | |
249
| Orissa
| Koraput
| Koraput
| Rice
Mills | |
250
| Orissa
| Puri
| Puri
| Rice
Mills | |
251
| Orissa
| Sambhalpur
| Sambhalpur
| Rice
Mills | |
252
| Punjab
| Amritsar
| Amritsar
| Rice
Mills | |
253
| Punjab
| Amritsar
| Amritsar
| Shoddy
Yarn | |
254
| Punjab
| Amritsar
| Amritsar
| Powerloom
| |
255
| Punjab
| Fatehgarh
Sahib | Mandi
Govindgarh |
Steel
Re-rolling | |
256
| Punjab
| Gurdaspur
| Batala
| Machine
Tools | |
257
| Punjab
| Gurdaspur
| Batala,Gurdaspur
| Rice
Mills | |
258
| Punjab
| Gurdaspur
| Batala
| Castings
& Forging | |
259
| Punjab
| Jalandhar
| Jalandhar
| Sports
Goods | |
260
| Punjab
| Jalandhar
| Jalandhar
| Agricultural
Implements | |
261
| Punjab
| Jalandhar
| Jalandhar
| Handtools
| |
262
| Punjab
| Jalandhar
| Jalandhar
| Rubber
Goods | |
263
| Punjab
| Jalandhar
| Kartarpur
| Wooden
Furniture | |
264
| Punjab
| Jalandhar
| Jalandhar
| Leather
Tanning | |
265
| Punjab
| Jalandhar
| Jalandhar
| Leather
Footwear | |
266
| Punjab
| Jalandhar
| Jalandhar
| Surgical
Instruments | |
267
| Punjab
| Kapurthala
| Kapurthala
| Rice
Mills | |
268
| Punjab
| Kapurthala
| Phagwara
| Diesel
Engines | |
269
| Punjab
| Ludhiana
| Ludhiana
| Auto
Components | |
270
| Punjab
| Ludhiana
| Ludhiana
| Bicycle
Parts | |
271
| Punjab
| Ludhiana
| Ludhiana
| Hosiery
| |
272
| Punjab
| Ludhiana
| Ludhiana
| Sewing
M/C Components | |
273
| Punjab
| Ludhiana
| Ludhiana
| Industrial
Fastners | |
274
| Punjab
| Ludhiana
| Ludhiana
| Handtools
| |
275
| Punjab
| Ludhiana
| Ludhiana
| Machine
Tools | |
276
| Punjab
| Ludhiana
| Ludhiana
| Forging
| |
277
| Punjab
| Ludhiana
| Ludhiana
| Electroplating
| |
278
| Punjab
| Moga
| Moga
| Wheat
Threshers | |
279
| Punjab
| Patiala
| Patiala
| Agricultural
Implements | |
280
| Punjab
| Patiala
| Patiala
| Cutting
Tools | |
281
| Punjab
| Sangrur
| Sangrur
| Rice
Mills | |
282
| Rajasthan
| Alwar,S.
Madhopur, Bharatpur |
Alwar,S.
Madhopur Bharatpur belt |
Oil
Mills | |
283
| Rajasthan
| Ajmer
| Kishangarh
| Marbe
Slabs | |
284
| Rajasthan
| Ajmer
| Kishangarh
| Powerloom
| |
285
| Rajasthan
| Alwar
| Alwar
| Chemicals
| |
286
| Rajasthan
| Bikaner
| Bikaner
| Papad
Mangodi, Namkin | |
287
| Rajasthan
| Bikaner
| Bikaner
| Plaster
of Paris | |
288
| Rajasthan
| Dausa
| Mahuwa
| Sand
Stone | |
289
| Rajasthan
| Gaganagar
| Ganganagar
| Food
Processing | |
290
| Rajasthan
| Jaipur
| Jaipur
| Gems
& Jewellery | |
291
| Rajasthan
| Jaipur
| Jaipur
| Ball
Bearing | |
292
| Rajasthan
| Jaipur
| Jaipur
| Electrical
Engineering Equipment | |
293
| Rajasthan
| Jaipur
| Jaipur
| Food
Products | |
294
| Rajasthan
| Jaipur
| Jaipur
| Garments
| |
295
| Rajasthan
| Jaipur
| Jaipur
| Lime
| |
296
| Rajasthan
| Jaipur
| Jaipur
| Mechanical
Engineering Equipment | |
297
| Rajasthan
| Jhalawar
| Jhalawar
| Marble
Slabs | |
298
| Rajasthan
| Nagaur
| Nagaur
| Handtools
| |
299
| Rajasthan
| Sikar
| Shikhawati
| Wooden
Furniture | |
300
| Rajasthan
| Sirohi
| Sirohi
| Marble
Slabs | |
301
| Rajasthan
| Udaipur
| Udaipur
| Marble
Slabs | |
302
| Tamil
Nadu | Chennai
| Chennai
| Auto
components | |
303
| Tamil
Nadu | Chennai
| Chennai
| Leather
Products | |
304
| Tamil
Nadu | Chennai
| Chennai
| Electroplating
| |
305
| Tamil
Nadu | Coimbatore
| Coimbatore
| Diesel
Engines | |
306
| Tamil
Nadu | Coimbatore
| Coimbatore
| Agricultural
Implements | |
307
| Tamil
Nadu | Coimbatore
| Tirupur
| Hosiery
| |
308
| Tamil
Nadu | Coimbatore
| Coimbatore
| Machine
Tools | |
309
| Tamil
Nadu | Coimbatore
| Coimbatore
| Castings
& Forging | |
310
| Tamil
Nadu | Coimbatore
| Coimbatore,Palladam,Kannam
Palayam |
Powerloom
| |
311
| Tamil
Nadu | Coimbatore
| Coimbatore
| Wet
Grinding Machines | |
312
| Tamil
Nadu | Erode
| Surampatti
| Powerloom
| |
313
| Tamil
Nadu | Karur
| Karur
| Powerloom
| |
314
| Tamil
Nadu | Madurai
| Madurai
| Readymade
Garments | |
315
| Tamil
Nadu | Madurai
| Madurai
| Rice
Mills | |
316
| Tamil
Nadu | Madurai
| Madurai
| Dal
Mills | |
317
| Tamil
Nadu | Namakkal
| Thiruchengode
| Rigs
| |
318
| Tamil
Nadu | Salem
| Salem
| Readymade
Garments | |
319
| Tamil
Nadu | Salem
| Salem
| Starch
& Sago | |
320
| Tamil
Nadu | Thanjavur
| Thanjavur
| Rice
Mills | |
321
| Tamil
Nadu | Tiruchirappalli
| Tiruchirappalli
| Engineering
Equipment | |
322
| Tamil
Nadu | Tiruchirappalli
| Tiruchirapalli
(Rural) |
Artificial
Diamonds | |
323
| Tamil
Nadu | Tuticorin
| Kovilpathi
| Safety
Matches | |
324
| Tamil
Nadu | Vellore
| Ambur,Vaniyambadi,
Pallar Valley |
Leather
Tanning | |
325
| Tamil
Nadu | Virdhunagar
| Rajapalayam
| Cotton
Mills(Gauge Cloth) | |
326
| Tamil
Nadu | Virudhunagar
| Virudhunagar
| Tin
Container | |
327
| Tamil
Nadu | Virudhunagar
| Sivakasi
| Printing
| |
328
| Tamil
Nadu | Virudhunagar
| Sivakasi
| Safety
Matches & Fire Works | |
329
| Tamil
Nadu | Virudhunagar
| Srivilliputhur
| Toilet
Soap | |
330
| Uttar
Pradesh |
Agra
| Agra
| Foundry
| |
331
| Uttar
Pradesh |
Agra
| Agra
| Leather
Footwear | |
332
| Uttar
Pradesh |
Agra
| Agra
| Mechanical
Engineering Equipment | |
333
| Uttar
Pradesh |
Aligarh
| Aligarh
| Brass
& Gunmetal Statues | |
334
| Uttar
Pradesh |
Aligarh
| Aligarh
| Locks
| |
335
| Uttar
Pradesh |
Aligarh
| Aligarh
| Building
Hardware | |
336
| Uttar
Pradesh |
Allahabad
| Mau
| Powerloom
| |
337
| Uttar
Pradesh |
Allahabad
| Mau
Aima | Leather
Products | |
338
| Uttar
Pradesh |
Banda
| Banda
| Powerloom
| |
339
| Uttar
Pradesh |
Bulandshahr
| Khurja
| Ceramics
| |
340
| Uttar
Pradesh |
Firozabad
| Firozabad
| Glass
Products | |
341
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Electronic
Goods | |
342
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Toys
| |
343
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Chemicals
| |
344
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Electrical
Engineering Equipment | |
345
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Garments
| |
346
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Mechanical
Engineering Equipment | |
347
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Packaging
Material | |
348
| Uttar
Pradesh |
Gautam
Buddha Nagar |
Noida
| Plastic
Products | |
349
| Uttar
Pradesh |
Ghaziabad
| Ghaziabad
| Chemicals
| |
350
| Uttar
Pradesh |
Ghaziabad
| Ghaziabad
| Mechanical
Engineering Equipment | |
351
| Uttar
Pradesh |
Ghaziabad
| Ghaziabad
| Packaging
Material | |
352
| Uttar
Pradesh |
Gorakhpur
| Gorakhpur
| Powerloom
| |
353
| Uttar
Pradesh |
Hathras
| Hathras
| Sheetwork
(Globe, Lamp) | |
354
| Uttar
Pradesh |
Jhansi
| Jhansi
| Powerloom
| |
355
| Uttar
Pradesh |
Kannauj
| Kannauj
| Perfumery
& Essential Oils | |
356
| Uttar
Pradesh |
Kanpur
| Kanpur
| Saddlery
| |
357
| Uttar
Pradesh |
Kanpur
| Kanpur
| Cotton
Hosiery | |
358
| Uttar
Pradesh |
Kanpur
| Kanpur
| Leather
Products | |
359
| Uttar
Pradesh |
Meerut
| Meerut
| Sports
Goods | |
360
| Uttar
Pradesh |
Meerut
| Meerut
| Scissors
| |
361
| Uttar
Pradesh |
Moradabad
| Moradabad
| Brassware
| |
362
| Uttar
Pradesh |
Muzaffarnagar
| Muzaffarnagar
| Rice
Mills | |
363
| Uttar
Pradesh |
Saharanpur
| Saharanpur
| Rice
Mills | |
364
| Uttar
Pradesh |
Saharanpur
| Saharanpur
| Woodwork
| |
365
| Uttar
Pradesh |
Varanasi
| Varanasi
| Sheetwork
(Globe, Lamp) | |
366
| Uttar
Pradesh |
Varanasi
| Varanasi
| Powerloom
| |
367
| Uttar
Pradesh |
Varanasi
| Varanasi
| Agricultural
Implements | |
368
| Uttar
Pradesh |
Varanasi
| Varanasi
| Electric
Fan | |
369
| Uttaranchal
| Dehradun
| Dehradun
| Miniature
Vacuum Bulb | |
370
| Uttaranchal
| Haridwar
| Roorkee
| Survey
Instruments | |
371
| Uttaranchal
| Udham
Singh Nagar |
Rudrapur
| Rice
Mills | |
372
| West
Bengal |
Bankura
| Barjora
| Fishing
Hooks(Information awaited) | |
373
| West
Bengal |
HMC
& Bally Municipal area |
Howrah
| Foundry
| |
374
| West
Bengal |
Howrah
| Bargachia,Mansinghapur,
Hantal, Sahadatpur & Jagatballavpur |
Locks
| |
375
| West
Bengal |
Howrah
| HMC
& Bally Municipal area Sevok Rd |
Steel
Re-rolling | |
376
| West
Bengal |
Howrah
| Domjur
| Artificial
& Real Jewellery | |
377
| West
Bengal |
Cooch
Bihar | Cooch
Bihar-I, Tufanganj,Mathabangha, Mekhliganj |
Sitalpati/
Furniture | |
378
| West
Bengal |
Kolkata
| Wellington,
Khanpur |
Electric
Fans | |
379
| West
Bengal |
Kolkata
| Sovabazar,
Cossipur |
Hosiery
| |
380
| West
Bengal |
Kolkata
| Metiaburuj
Ward No. 138 to 141 |
Readymade
Garments | |
381
| West
Bengal |
Kolkata
| Tiljala,
Topsia,Phoolbagan |
Leather
Goods | |
382
| West
Bengal |
Kolkata
| Daspara(Ultadanga),
Ahiritola |
Dal
Mills | |
383
| West
Bengal |
Kolkata
| Taltala,
Lenin, Sarani |
Mechanical
Engineering Equipment | |
384
| West
Bengal |
Kolkata
| Bowbazar,
Kalighat |
Wood
Products | |
385
| West
Bengal |
Nadia
| Matiary,Dharmada,Nabadwip
| Bell/Metal
Utensils | |
386
| West
Bengal |
Nadia
| Ranaghat
| Powerloom
| |
387
| West
Bengal |
Purulia
| Jhalda
Proper, Purulia, Begunkodar & Tanasi |
Handtools
| |
388
| West
Bengal |
South
24 Parganas |
Kalyanpur,Purandarpur,
Dhopagachi |
Surgical
Instruments |
Annexure
IV
| Policy
Package for stepping up credit to Small and Medium Enterprises The
small-scale industries (SSI) produce about 8000 products, contribute 40% of the
industrial output and offer the largest employment after agriculture. The sector,
therefore, presents an opportunity to the nation to harness local competitive
advantages for achieving global dominance. In recognition of these aspects, the
National Common Minimum Programme makes the following declarations for accelerating
the development of small-scale sector. "Household
and artisanal manufacturing will be given greater technological, investment and
marketing support. Small–scale industry will be freed from Inspector Raj and given
full credit, technological and marketing support. Infrastructure upgradation in
major industrial clusters will receive urgent attention." |
| 2.
From SSI to SME: Defining the New Paradigm 2.1
Government policy as well as credit policy has so far concentrated on manufacturing
units in the small-scale sector. The lowering of trade barriers across the globe
has increased the minimum viable scale of enterprises. The size of the unit and
technology employed for firms to be globally competitive is now of a higher order.
The definition of small-scale sector needs to be revisited and the policy should
consider inclusion of services and trade sectors within its ambit. In keeping
with global practice,. there is also a need to broaden the current concept of
the sector and include the medium enterprises in a composite sector of Small and
Medium Enterprises (SMEs). A comprehensive legislation, which would enable the
paradigm shift from small-scale industry to small and medium enterprises under
consideration of Parliament. The Reserve Bank of India, had meanwhile set up an
Internal Group which has recommended: "Current
SSI/tiny industries definition may continue. Units with investment in plant and
machinery in excess of SSI limit and up to Rs.10 crore may be treated as Medium
Enterprises (ME). The definition may be reviewed after enactment of the Small
and Medium Enterprises Development Bill. Only SSI financing will be included in
Priority Sector." 2.2
It is proposed to accept the recommendation with regard to the credit facilities
being offered by the banking sector and accordingly request the Reserve Bank of
India to advise the banks to frame a policy for enhancing the flow of credit to
both small and medium enterprises, within the overall framework of credit policy
of banks to small and medium enterprises. | |
2.3.
The challenges being faced by the small and medium scale sector may be briefly
set out as follows- a.
Small and Medium Enterprises (SME), particularly the tiny segment of the small
enterprises have inadequate access to finance due to lack of financial information
and non-formal business practices. SMEs also lack access to private equity and
venture capital and have a very limited access to secondary market instruments. b.SMEs
face fragmented markets in respect of their inputs as well as products and are
vulnerable to market fluctuations. c.SMEs
lack easy access to inter-state and international markets. d.The
access of SMEs to technology and product innovations is also limited. There is
lack of awareness of global best practices. e.SMEs
face considerable delays in the settlement of dues/payment of bills by
the large scale buyers. With
the deregulation of the financial sector, the ability of the banks to service
the credit requirements of the SME sector depends on the underlying transaction
costs, efficient recovery processes and available security. There is an immediate
need for the banking sector to focus on credit and finance requirements of SMEs. |
| 3.
Measures to increase the quantum of credit to SMEs at the right price 3.1
Public Sector Banks will be advised to fix their own targets for funding
SMEs in order to achieve a minimum 20% year on year growth in credit
to SMEs. The objective is to double the flow of credit from Rs.67,600
crore in 2004-05 to Rs.135,200 crore to the SME sector by 2009-10, i.e. within
a period of 5 years. | |
3.2
Public Sector Banks will be advised to follow a transparent rating system with
cost of credit being linked to the credit rating of the enterprise. 3.3
SIDBI in association with Credit Information Bureau(India) Ltd. (CIBIL)will expedite
setting up a credit rating agency. 3.4
SIDBI in association with Indian Banks’ Association (IBA) would collect and pool
common data on risk in each identified cluster and develop an IT-enabled application,
appraisal and monitoring system for small (including tiny) enterprises. This would
help reduce transaction cost as well as improve credit flow to small (including
tiny) enterprises in the clusters. 3.5
The National Small Industries Corporation has recently introduced a Credit Rating
Scheme for encouraging SSI units to get themselves credit rated by reputed credit
rating agencies. Public Sector Banks will be advised to consider these ratings
appropriately and as per availability, and structure their rates suitably.
3.6
SIDBI has developed a Credit Appraisal & Rating Tool (CART) as well as a Risk
Assessment Model (RAM) and a comprehensive rating model for risk assessment of
credit proposals for SMEs. Public sector banks will be advised to take advantage
of these models as appropriate and reduce their transaction costs. |
| 4.
Outreach of Formal Credit: Opening of New Accounts The
commercial banks (including regional rural banks) with over 67,000 branches, will
make concerted efforts to provide credit cover on an average to at least 5 new
tiny,small and medium enterprises at each of their semi urban/urban
branches per year. | |
5.
Nursing the Sick Units Back to Health: Debt Restructuring Reserve
Bank will issue detailed guidelines relating to debt restructuring mechanism so
as to ensure restructuring of debt of all eligible small and medium enterprises
at terms which are not less favourable than the Corporate Debt Restructuring
(CDR) mechanism in the banking sector. The restructuring would follow
upon a request to that effect from the borrowing unit. All accounts,
except those classified as ‘loss assets’ will be eligible for restructuring, provided
the industrial units are viable or potentially viable. Based
on the Reserve Bank’s guidelines, banks may formulate, with the approval of their
Boards of Directors, more liberal policies relating to restructuring of accounts.
Until the banks formulate their own policies, Reserve Bank’s guidelines will be
operative. A
one-time settlement scheme to apply to small-scale NPA accounts in the books of
the banks as on March 31, 2004 will be introduced.The scheme will be in force
upto March 31, 2006. | |
6.
Facilitative Measures
Reserve Bank had issued a detailed master circular on March 2005 on the time to
be taken for disposing of loan applications of SSI units, the limit up to which
banks are obliged to grant collateral-free and composite loans, norms for computation
of working capital credit limits to SSI units, opening of atleast one specialized
SSI branch in each district, etc. Taking these guidelines as indicative minimum,
banks will formulate a comprehensive and more liberal policy relating to advances
to SME sector. Untill the banks formulate such a policy, the extant instructions
of Reserve Bank will be applicable to advances granted or to be granted by banks
to SME units. | |
7.
Credit Guarantee Fund Trust Scheme for Small Industries(CGTSI) At
present, Member Lending Institutions (MLIs), like banks, are provided guarantee
cover of 75% of the amount of default by CGTSI,I respect of term loan and/or working
capital facilities up to Rs.25 lakh extended by the MLIs to new and existing SSI
units/IT/software units/small scale service business enterprises (SSSBEs), without
collateral security and/or third party guarantee. One-time guarantee fee of 2.5%
and annual service fee of 0.75% of the credit facility sanctioned are currently
charged by CGTSI from the MLIs. In order to reduce the cost of guarantee to the
weaker segments of the borrowers, particularly tiny units, the CGTSI will be advised
to reduce the one-time guarantee fee from 2.5% to 1.5% for all (i) loans up to
Rs.2 lakh, (ii) eligible women entrepreneurs, and (iii) eligible borrowers located
in the North Eastern regions (Sikkim) and Jammu & Kashmir. Further, public
sector banks will be encouraged to absorb the annual service fee in excess of
0.25% in respect of guarantee for all (i) loans up to Rs.2 lakh, (ii)eligible
women entrepreneurs, and (iii) eligible borrowers located in the North Eastern
regions(Sikkim) and Jammu & Kashmir. | |
8.
Cluster based approach Cluster
based approach for financing SME sector offers possibilities of reduction of transaction
costs and mitigation of risk. About 388 clusters have already been identified.
Cluster based approach now be treated as a thrust area. Banks will increasingly
adopt the cluster-based approach for SME financing. To broaden the financing options
for infrastructure development in clusters through public private partnership,
SIDBI will formulate a scheme in consultation with the stakeholders. SIDBI
has already initiated the process of establishing Small Enterprises Financial
Centres in select clusters. Risk profile of each cluster would be studied by a
professional credit rating agency and such risk profile reports would be made
available to commercial banks. Each lead bank of a district will consider adoption
of atleast one cluster. | |
9.
Setting up of Watchdogs: Monitoring and Review The
following supervisory arrangements will be ensured: a.
The existing institutional arrangements for review of credit to SSI sector like
the Standing Advisory Committee in Reserve Bank of India and cells at the banks’
head office level as well as at important regional centres will be made more rigorous
and regular. They will also review the flow of credit to small (SSI) and medium
enterprises. b.
At the Regional offices, the Reserve Bank will constitute empowered committees
with the Regional Director of the Reserve Bank as the Chairman to review the progress
in SME financing and rehabilitation of sick small (SSI) and medium units and to
coordinate with other banks/financial institutions and the state governments in
removing bottlenecks, if any, to ensure smooth flow of credit to the sector. The
said Regional level committees may decide on the need to have similar committees
at cluster/district levels. c.
The banks will ensure specialized SME branches in identified clusters/centres
with preponderance of small enterprises to enable the entrepreneurs to have easy
access to the bank credit and to equip bank personnel to develop requisite expertise.
The existing specialised SSI branches may be also be redesignated as SME branches.
d.
Boards of banks will be advised to review the progress in achieving the self-set
targets as also rehabilitation and restructuring of SME accounts on a quarterly
basis to ensure that the required emphasis is given to this sector. e.For
wider dissemination and easy accessibility, the policy guidelines formulated by
Boards of banks as well as instructions/guidelines issued by Reserve Bank will
be displayed on the respective websites of Public Sector Banks as well as website
of SIDBI. The banks would also be advised to prominently display all the facilities/schemes
offered by them to the small entrepreneurs at each of their branches. |
Appendix Master
Circular SME
SECTOR LENDING List
of Circulars consolidated by the Master Circular
| Sl
No. | Circular
No. | Date |
Subject |
Paragraph No. |
| 1 |
RPCD.No.Plan.BC.84/04.09.01/2006-07 |
30.04.2007 | |
1 |
| 2 |
RPCD.PLNFS.BC.No.63/06.02.31/2006-07 |
04.04.2007 |
Credit
flow to Micro, Small and Medium Enterprises Sector – Enactment of the Micro, Small
and Medium Enterprises Development (MSMED), Act 2006 |
1-1,IV,13.6 |
| 3 |
RPCD.PLNFS.BC.No.35/06.02.31/2005-06
|
25-08-2005 |
Policy
Package for Stepping up Credit to Small and Medium Enterprises --Announcements
made by the Union Finance Minister (for private sector, foreign banks & RRBs) |
IV,13.5 |
| 4 |
RPCD.PLNFS.BC.No.31/06.02.31/2005-06
|
19-08-2005 |
Policy
Package for Stepping up Credit to Small and Medium Enterprises --Announcements
made by the Union Finance Minister (for public sector banks) |
IV,13.5 |
| 5 |
RPCD.PLNFS.BC.No.101/06.02.31/2004-05
|
20.05.
2005 |
Scheme
for Small Enterprises Financial Centres (SEFCs) |
1.6.4,4,II.6 |
| 6 |
RPCD.
Plan. BC. 64/04.09.01/ 2004-05 |
15.12.2004 |
Priority
Sector Lending-Investment in Special Bonds issued by Specified Institutions |
I.1,
1.1.1,1.12,1.1.3 | |
7 |
RPCD.PLNFS.BC.61/06.02.31
(WG)/ 2004-05 |
08.12.2004 |
Working
Group on Flow of Credit to SSI Sector-Interest rates on with SIDBI-in lieu of
shortfall in priority sector obligations |
III.3.1,3.5 | |
8 |
RPCD.
PLNFS. BC. 43/06.02.31/ 2004-05 |
26.10.2004 |
Investment
by banks in securitized assets pertaining to SSI sector |
II,2.1,2
2,2.3 | |
9 |
RPCD.PLNFS.BC.28/06.02.31
(WG)/ 2004-05 |
04.09.2004 |
Working
Group on Flow of Credit to SSI sector |
IV.
13.3 | |
10 |
RPCD.
Plan. BC. 41/04.09.01/ 2003-04 |
03.11.2003 |
Priority
sector lending – Deposit of shortfall with SIDBI |
III.
3.1 | |
11 |
RPCD.
PLNFS. BC. 40/06.02.31/ 2003-04 |
03.11.2003 |
Credit
facilities for SSIs – Lending by banks to NBFCs for the purpose of on-lending
to SSIs |
1.6.5 | |
12 |
RPCD.
PLNFS. BC. 39/06.02.80/ 2003-04 |
03.11.2003 |
Credit
facilities for SSIs – Collateral Free Loans |
IV
2.4 | |
13 |
RPCD.
PLNFS No.620/06.02.28(i)/ 2002-03 |
11.09.2003 |
SAC
meeting Implementation of Action Points- Interest rate- Slab basis |
IV
5 | |
14 |
RPCD.
PLNFS.1 /06.02.28(i))/ 2003-04 |
01.07.2003 |
SAC
meeting Implementation of Action Points- Identification of Clusters |
IV.2.9
IV13.3 | |
15 |
RPCD.
PLNFS. 2292/06.02. 28(i))/ 2003-04 |
13.06.2003 |
SAC
meeting Implementation of Action Points- Self Set target for SSI |
III.1.1,2.1.12.1.2 |
| 16 |
RPCD.
PLNFS. BC. 24/06.02.77/ 2002-03 |
04.10.2002 |
Flow
of credit to SSIs – Time schedule for disposal of loan applications |
IV.
2.2 | |
17 |
DBOD.No,BL.BC.74/22.01.001/ 2002 |
11.03.2002 |
Conversion
of General Banking Branches to Specialised SSI Branches |
IV
2.6 | |
18 |
RPCD.
PLNFS. BC.58/ 06.02.80/ 2001-02 |
23.01.2002 |
Collateral
free loans- SSIs |
IV
2.4 | |
19 |
RPCD.
PLNFS. BC.57/ 06.04.01/ 2001-02 |
16.01.2002 |
Guidelines
for rehabilitation of Sick Small Scale Industrial Units |
IV
2.8 | |
20 |
IECD.No.5/08.12.01/2000-01 |
16.10.2000 |
Flow
of Credit to SSI Sector- Decision of the Group of Ministers |
IV
2.7 | |
21 |
RPCD.PLNFS.BC.No.57/06.02.31/
99-2000 |
02.02.2000 |
Priority
Sector Advances – Credit Deployment to SSI Sector |
1.1.1,1.1.2 | |
22 |
RPCD.No.PLNFS.BC.89/06.02.31-98/99 |
14.06.1999 |
Interest
on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1998 |
IV
2.7 | |
23 |
RPCD.No.PLNFS.BC.89/06.02.31-98/99 |
01.03.1999 |
Flow
of Credit to SSI sector-Computation of Working Capital limits |
II
3.3 | |
24 |
RPCD.No.PLNFS.BC.22/06.02.31 (ii)
-98/99 | 28.08.1998 |
High
Level Committee on SSI- Kapur Committee- Implementation of recommendations |
IV.13.2 |
| 25 |
RPCD.No.PLNFS.BC.127/06.02.
31/97/98 |
08.06.1998 |
Flow
of Credit to SSI Sector |
IV
5 | |
26 |
RPCD.PLNFS.No.792/06.02.31/97/98 |
02.03.1998 |
Flow
of Credit to SSI Sector-Opening of Specialised SSI Branches |
IV
2.6 | |
27 |
RPCD.No.PLNFS.BC.89/06.02.31-97/98 |
19.02.1998 |
Priority
Sector Advances - Credit Deployment to SSI Sector |
I
1.1, III 1.3,1.1.2 | |
28 |
RPCD.No.PLNFS.BC.66/06.02.31-97/98 |
05.01.1998 |
Priority
Sector Advances - Credit Deployment to SSI Sector |
III
1.3,1.1, 1.1.2 |
| 29 |
RPCD.No.Plan.BC.74/04.09.01/96-97 |
11.12.1996 |
Priority
Sector Lending - Shortfall in Achievement of Target |
III
4.1-4.4 | |
30 |
RPCD.No.PLNFS.BC.23/06.06.12/94-95 |
01.09.1995 |
Bank
Credit to KVI Sector |
1
1.5 | |
31 |
RPCD.No.Plan.BC.38/04.09.09/94-95 |
22.09.1994 |
Lending
to Priority Sector by foreign banks |
III
2.1.1,2.1.3 | |
32 |
RPCD.No.PLNFS.BC.16/06.06.12/94-95 |
28.07.1994 |
Bank
Credit to KVI Sector |
I
1.6 | |
33 |
RPCD.No.PLNFS.BC.84/06.06.12/93-94 |
07.01.1994 |
Bank
Credit to KVI Sector - Priority Sector Advances |
I
1.5 | |
34 |
RPCD.No.PLNFS.BC.99/06.0231/92-93 |
17.04.1993 |
Report
of the Committee to examine the adequacy of institutional credit to SSI sector
and related aspects- Nayak Committee |
IV
13.1 | |
35 |
RPCD.No.PLNFS.BC.45/PS.72/86 |
20.01.1986 |
Financing
of Bought Leaf Factories for Manufacturing |
I
1.9 | |
36 |
RPCD.No.PLNFS.BC.44/PS.72/86 |
17.01.1986 |
Bank
Finance to Ship-breaking Industry |
I
1.8 | |
