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:
MSME sector comprises, Micro Enterprise, Small Enterprise and Medium Enterprises –
Industry & Service Segments
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.
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.
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.
Depending upon the quantum of loan requirement under Small Enterprises (including
Micro Enterprises) and Medium Enterprises, loan application forms are available at your
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: