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MSME-Policy-of-the-Bank

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					MSME POLICY
The Bank has adopted a Policy for lending to SME sector, in tune with Govt. of India
guidelines as per MSMED Act, 2006, which has come into force w.e.f. 2nd October, 2006.
The salient features of the policy are:
Definitions :

MSME sector comprises, Micro Enterprise, Small Enterprise and Medium Enterprises –
Industry & Service Segments
             Industry                        Service
 Micro       The investment in plant and The         investment  in  equipment
 Enterprise machinery (original cost) does (original cost) does not exceed `.10
                not exceed `.25 lacs.             lacs.
 Small          Investment     in     plant   and The     investment     in   equipment
 Enterprise     machinery (original cost) is more (original cost) is more than `.10 lacs
                than `.25 lacs but does not
                                                  but does not exceed `.200 lacs.
                exceed `.500 lacs.
 Medium         Investment     in     plant   and The     investment     in   equipment
 Enterprise     machinery (original cost) is more (original cost) is more than `.200 lacs
                than Rs.500 lacs but does not
                                                  but does not exceed `.500 lacs.
                exceed `.1000 lacs.

Note:
1. Enterprise means an industrial undertaking or a business concern or any other
   establishment, by whatever name called, engaged in the manufacture or production of
   goods, in any manner pertaining to any industry specified in the First Schedule to the
   Industries (Development and Regulation) Act, 1951 or engaged in providing or
   employing plant and machinery in the process of value addition to the final product
   having a distinct name or character or use, and rendering of any service or services.
2. In calculating the investment in plant and machinery, the cost of pollution control,
   research and development, industrial safety devices and such other items as may be
   specified, by notification, shall be excluded.
3. The word equipment is defined as “All instruments, office machines and such other
   electro mechanical or electronic appliances that are directly related to the service
   rendered but excluding furniture, fittings and other items not so related.”

Time Norms for disposal of Loan Applications:

Loan applications from units under SME sector will be disposed off within a reasonable
time as mentioned below, provided such applications are complete in all respects.
                              Sanctions      at Sanctions       at Sanctions at Head
                              Branch             Circle Office      Office
 Loans upto Rs.25000/-        Within 2 weeks     Not applicable     Not applicable
 Loans beyond Rs.25000/- & Within 4 weeks        Within 4 weeks     Within 4 weeks
 upto Rs.5 lakhs
 Loans over Rs.5 lakhs & Within 30 days          Within 45 days     Within 45 days
 upto Rs.25 lakhs
 Loans over Rs.25 lakhs       Within 30 days     Withing 45 days    Within a maximum
                                                                    of Rs.8 weeks

Token of Service on receipt of each application for credit facilities shall be issued.
Security:

    Assets created out of Bank loan.
    Charge on the machinery/equipment & other fixed assets directly associated with
     the activity of the enterprise.
    NO collateral security/third party guarantee for loans:
      i.    Up to `.10 lacs to Micro & Small Enterprises
      ii.    Upto `.25 lacs in respect of MSMEs whose track record and financial position
             are good as per Bank records
      iii.   Upto `.100 lacs (aggregate) in respect of Micro and Small Enterprises whose
             borrowal accounts are covered under Credit Guarantee fund for Micro &
             Small Enterprises (CGMSE).
             [Note: Presently CGMSE cover is not available to credit facilities extended to
             retail traders, educational institutions, training institutes, training cum
             incubator centres and to Medium Enterprises].
    Collateral security/third party guarantee for loans beyond the above limits is insisted
     on merits of each case, as determined by Bank, subject to RBI/GOI guidelines.

Application forms:

Depending upon the quantum of loan requirement under Small Enterprises (including
Micro Enterprises) and Medium Enterprises, loan application forms are available at your
nearest branch.

The following prescribed applications are made available to the SME clients at the
branches of the Bank. Format of Applications may also be downloaded from the website
of the Bank.
 Application To Micro & Small Enterprises    To Medium Enterprises
 NF 836                                      Up to `.2 lacs
 NF 837                                         Over `.2 lacs and upto `.15 lacs
 NF 838                                         Over `.15 lacs and up to `.100 lacs
 NF 903*                                        `.1 crore and above
 NF 998*     To Micro & Small Enterprises
             irrespective of the loan amount
* to be submitted along with CMA data wherever applicable

All applications are to be accompanied with project report, Audited/unaudited financial
statements for the preceding 3 years, copies of licences, permits, sales tax assessment
orders’ income tax/wealth tax assessment orders, projected financial statements,
cash/fund flow statements, wherever required/insisted.

Financial statements of the immediately preceding year should not be 6 months old. In
such cases, provisional financial statement as on the latest date also to be submitted.

Conditions apply. The information provided above is only illustrative and not exhaustive.

For more details, please contact your nearest Canara Bank branch or E mail to:
hosbu@canarabank.com

				
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