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Master Circular - Lending To Small & Medium Enterprises (Smes) Sector

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 Sector

An 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

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