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					Agro industries: the lure of value addition

Agro industries help strengthen the farm sector and stabilise rural incomes


AGRO Industries are considered an extended arm of agriculture but in India they have not received as much attention as
agriculture. While agriculture contributes about 25 per cent of India's GDP the value added by the processing industry is only 8
per cent of total food production. For example, only two per cent of horticulture products are estimated to be processed and
more than 30 per cent of production is wasted due to lack of storage and processing facilities.


The agro Industry is broadly categorised in two-three types: (i) Village Industries owned and run by rural households with very
little capital Investment and a high level of manual labour, (ii) Small scale industry characterised by medium investment and
semi-automation, and (iii) Large scale industry involving large investment and a high level of automation. Pickles, papad,
basket making fall in the first group and edible oil and rice mills in the small Industry segment. Sugar, jute and cotton mills are
in the large scale sector. The three segments have come up mainly based on their ability to bring in capital and capacity to
market products.


The development of agro-based industries started during pre-independence days. Cotton mills, sugar mills, jute mills were
promoted in the corporate sector. During post-Independence days with a view to providing more employment and using local
resources small scale and village industries were encouraged. The objective, while not questionable, created unnecessary
confusion in the minds of the entrepreneurs. However, in the recent past concessions, preferences and reservation for village
and small industries have been reduced considerably, if not eliminated.


However, the private sector is yet to realise the full potential of agro industries. The global market is enormous for sugar,
coffee, tea and processed foods such as sauce, jelly and honey. The market for processed meat, spices and fruits is equally
large. Only with mass production aided by modern technology and intensive marketing can the domestic market as well as the
export market be exploited to the fullest extent.


If only one would spend a few hours in the food section of the Wal-Mart departmental store in a U.S. city, one would
understand the depth and width of the market for processed foods. Most of the foods on the shelves are imported from Latin
American and European countries. The position is the same in Singapore, London or New York.


Huge domestic market


Even before exploring the opportunities abroad, one has to look within the country. The size of the Indian food market is Rs.
350,000 crores. An average Indian spends around 53 per cent of his/her income on food. The domestic market for processed
foods is not only huge but is growing fast in tandem with the economy.


It is not that the Government and private enterprise have done nothing notable in this regard. The contribution of the
organised sector and the village industries sector under the aegis of the Khadi and Village Industries Corporation cannot be
underestimated. Besides these, a substantial quantity produced by the tiny and medium sectors goes unnoticed. If more
incomes are to be generated in the rural areas to improve the lot of farmers, it is imperative to accelerate the pace of growth
of the agricultural sector and the agro industry segment. Unfortunately the large corporates in the private sector are reluctant
to enter the field in a big way. The position is somewhat similar to the status prevailed in the early 1950s in setting up five-
star hotels in the metros. Even in New Delhi, it was the Government that opened the first five star hotel and not a private
enterprise. In the current dispensation of economic policies it is simply out of the question for the public sector to give a lead in
the promotion of agro-based industries. ITC, HLL, Nestle entered the Indian market a long time ago and made a deep
penetration in the market, particularly in the rural areas.


Indian companies have to learn a few lessons from them. In order to capture the higher end of the local market and get a fair
share of the export market, what is required is large scale investment and adoption of the latest technologies supported by
intensive marketing efforts. Perhaps, a foreign tie-up may be beneficial. Even in traditional products such as coffee, tea and
spices, processed and packaged items, preferably with a brand name, have worldwide demand besides a growing domestic
market. The increasing environmental concerns will give further stimulus to agro based industries. Jute and cotton bags, once
replaced by plastic bags, have made a comeback. It is the right time to engage in mass production of low cost jute/cotton bags
to replace plastic bags.


Processed foods


Agro industries help in processing agricultural products such as field crops, tree crops, livestock and fisheries and converting
them to edible and other usable forms. They produce both edible and non-edible things. However, edible products otherwise
known as processed foods form a predominant segment. The levels of processing and manufacturing can be classified into
three groups, namely manual, mechanical and chemical or a combination thereof. In choosing the process, the main
considerations are the nature of the raw material, technology of processing, and packing.
The volume of production depends not only on the capital investments and machine capacity but also on the ability to market
them in the domestic market and abroad. The processing level of an agro industry may be at the primary, secondary or
tertiary stage. In the case of hides and skins, India exports largely semi-processed items whereas in coffee/tea, the exports
are mostly in secondary stage by way of fully processed bulk shipments without branding/packing. Exports at the tertiary stage
mean branding and packaging the product that are ready for use by the consumer.


The raw material and commodities produced and marketed in India are of a wide range such as paddy, wheat, rice, maize,
sugarcane, potato, cotton, fruits, vegetables, flowers, spices, fish, poultry, tea, coffee, medicinal plant and honey. All these
commodities are processed in one form or the other and consumed in huge quantities within the country and also exported.


The domestic market for these items is growing at a fast pace. There is an equally attractive export market for them.


While the development of the domestic market is the total responsibility of the industry, the export market can grow only if the
Government pronounces supportive policy measures and also activates promotion boards and councils such as APEDA, MPEDA,
Tea Board, Coffee Board, Cashew Export Promotion Council, Coir Board, Leather Promotion Council, Silk Board and Spices
Board. Besides these organisations, MMTC, the Trade Development Authority and the Indian Institute of Foreign Trade should
play a more active role. No doubt the exporter is the key person and has to play a vital role in building the business.


In view of the fact that the development of agro industries can help stabilise and make agriculture more lucrative and create
employment both at the production and marketing stages, commercial banks will have to meet their financial requirements
without hassles.


For Indian women, cooking is a way of life and also a matter of pride. The attitude may be slightly different in the case of
urban women, particularly employed women. It is therefore important for the food processing industries to create a distinctly
discernible value addition in all the processed food products to convince the majority of womenfolk. Dairy product is another
area where there is enormous potential. No doubt the country has made tremendous strides in the last 20 years in production
and processing of milk and milk products. But the fact remains that only 15 per cent of all the milk produced is processed.


In a land where large numbers suffer from diabetic or cardiac ailments availability of fat free milk, fat free curd and sugar free
food is poor. A simple product like soya milk is not produced in adequate quantity. Likewise, fish and shrimp, which have good
export potential, lack cold storage and modern processing facilities. While fish production is around six million tonnes a year
the frozen storage capacity spread over 500 units is only one lakh tonnes. Yet another area is herbal medicine. The world over
it is increasingly realised that herbal drugs do not have side effects. India has a good number of tried and tested herbal
products in use and what is required is rigorous quality control, proper packaging and a brand name. But to capture a foreign
market certain approvals have to be obtained from the foreign governments.


Multiple benefits


The focus on value addition in the agri sector is vital for comprehensive development of the rural economy. Since the food
processing industry creates jobs, demand for agri raw materials, leads to diversification and commercialisation of agriculture,
enhancing the incomes of farmers and creating surpluses for export of agro foods. The broad-based development of the food
processing industry will improve both the social and physical infrastructure of rural India.


A study by McKinsey reiterates the importance of the food sector in India. It indicates that food in India has an economic
multiplier of 2-2.5. That is for every rupee of revenue from food, the economy at large gets Rs. 2-2.50.


The difficulties experienced by the food processing industry have to be addressed by the industry, the promotion boards and
the Government with better co-ordination.


Quality raw material has to be produced in sufficient quantity and properly packed to facilitate further processing. This calls for
educating the farmers in production and harvesting techniques as also in packing. Some of the critical areas that require
immediate attention are strengthening of the infrastructure like cold storage, improving the production process in the
agriculture sector, relaxing or removing stringent laws and regulations, and ensuring reliable power supply.


Small Scale Industries

1.1. Small Scale and Ancillary Industries

Small scale industrial units are those engaged in the manufacture, processing or preservation of goods and whose investment
in plant and machinery (original cost) does not exceed Rs.1 crore. These would, inter alia, include units engaged in mining or
quarrying, servicing and repairing of machinery. In the case of ancillary units, the investment in plant and machinery (original
cost) should also not exceed Rs. 1 crore to be classified under small-scale industry.


The investment limit of Rs. 1 crore for classification as SSI has been enhanced to Rs.5 crore in respect of certain specified
items under hosiery, hand tools, drugs & pharmaceuticals, stationery items and sports goods by the Government of India.
1.2. Tiny Enterprises

The status of ‘Tiny Enterprises’ may be given to all small scale units whose investment in plant & machinery is up to Rs. 25 lac,
irrespective of the location of the unit.


1.3 Small Scale Service & Business Enterprises (SSSBEs)

1.3.1. Industry related service and business enterprises with investment up to Rs. 10 lac in fixed assets, excluding land and
building will be given benefits of small scale sector. For computation of value of fixed assets, the original price paid by the
original owner will be considered irrespective of the price paid by subsequent owners.


1.3.2. An illustrative list of eligible activities as SSSBEs and the illustrative list of activities that will not qualify as SSSBEs is
given in Annexures A - I & A - II respectively.


1.4. Indirect finance in the small-scale industrial sector will include credit to :

1.4.1 Agencies involved in assisting the decentralized sector in the supply of inputs and marketing of outputs of artisans,
village and cottage industries.


1.4.2 Government sponsored Corporation/organizations providing funds to the Weaker sections in the priority sector.


1.4.3 Advances to handloom co-operatives.


1.4.4 Term finance/loans in the form of lines of credit made available to State Industrial Development Corporation/State
Financial Corporations for financing SSIs.


1.4.5 Credit provided by banks to Khadi and Village Industries Commission (KVIC) under the scheme for provision of credit to
KVIC by consortium of banks for lending to viable Khadi and Village Industrial Units.


1.4.6 Funds provided by commercial banks to SIDBI/SFCs will be eligible for inclusion under the priority sector as indirect
finance to SSI.


1.4.7


                1.    Financing of NBFCs or other intermediaries for on-lending to the tiny sector.
                2.    All new loans granted by banks to NBFCs and other intermediaries for on-lending to SSI sector with effect
                      from November 11, 2003.




1.5 Industrial Estates

Loans for setting up industrial estates.


1.6 KVI Sector

All advances to KVI sector, irrespective of their size of operations, location and investment in plant and machinery, will be
covered under priority sector advances and will also be eligible for consideration under the sub-target (60 percent) of the SSI
Segment within the priority sector.


1.7 Manufacture of common salt through any process including manual operation (involving Solar evaporation) may be
considered as an industrial activity and credit provided by banks to units engaged in the manufacture of common salt which
satisfy the norms of SSI Unit may be classified under advances to SSI.


1.8 Units engaged in ship breaking/dismantling are composite ones which also undertake the processing of scrap thus obtained
and hence the entire activity can be covered under processing. Therefore, all small scale industrial units with original cost of
plant and machinery not exceeding Rs. 1 crore and engaged in ship breaking/dismantling activity may be considered as small
scale industrial undertaking and bank advances to such units reckoned as priority sector advances.


1.9 Bank loans to bought leaf factories manufacturing tea are to be reckoned as priority Sector lending to small scale industry,
provided the investment in plant and machinery (original cost) does not exceed the prescribed limits.


1.10 Water mills (Gharat) has been recognized as an industrial activity and shall be eligible for registration as small scale
industry.
2. Food and Agro-based Processing Sector

The following items within the food and agro-based processing sector would be eligible for classification as priority sector for
lending by banks :


           Fruit and vegetable processing industry
           Food grain milling industry
           Dairy products
           Processing of poultry and eggs, meat products
           Fish processing
           Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoa processing and chocolate),
            malt extract, protein isolate, high protein food, weaning food and extruded/other ready to eat food products
           Aerated water/soft drinks and other processed foods
           Special packaging for food processing industries
           Technical assistance and advice to food processing industries


With regard to the size of the units within this sector, it may be mentioned that so long the food and agro-based processing
units of small and medium size with investment in plant and machinery up to Rs. 5 crore were included under priority sector
lending. Subsequently, as per Government’s revised policy the investment ceiling (up to Rs. 5 crore) has been altogether
withdrawn.


2.1 Software Industry

Loans to software industry with credit limit upto Rs. 1 crore from the banking industry to be included under this item.


2.2 Venture Capital

Investment in Venture Capital will be eligible for inclusion in priority sector, subject to the condition that the venture capital
funds/companies are registered with SEBI.


However, fresh investments that may be made by Bank on or after July 1, 2005 shall not be eligible for classification under
priority sector lending and the investments, which has already been made by Bank up to June 30, 2005, shall not be eligible
for classification under priority sector lending with effect from April 1, 2006.


3. Lines of Credit

3.1 Banks may consider on merit, proposals received from State Industrial Development Corporations (SIDCs) and State
Financial Corporations (SFCs) for sanction of term Finance/loans in the form of lines of credit.


3.2 Such term finance/loans to the extent granted for/to the Small Scale Industrial (SSI) Units, will be treated as priority
sector lending, subject to the observation of following Conditions:


   I.       SFC/ SIDC should maintain separate and distinct accounts of fresh disbursements made to SSI units and outstanding
            amounts there against.
  II.       Periodical statements to be obtained from SFC/ SIDC to monitor the position.
 III.       Annually, a certificate issued by SFC/ SIDC statutory auditors certifying that the outstanding borrowings from banks
            were fully covered by the non-overdue loans outstanding in respect of fresh disbursements made to SSI units from
            out of term finance/ lines of credit granted by banks.
  IV.       The rate of interest to be charged by banks on such term finance/ loans/ lines of credit will be in conformity with the
            directives on interest rates issued by the Reserve Bank from time to time.


3.3 In order to ensure adequate credit to this sector, the credit requirements of village industries and other SSI units having
aggregate fund-based working capital limits upto Rs. 5 crores from the banking system, will be computed on the basis of a
minimum of 20 percent of their projected annual turnover for new as well as existing units.




4. Bills Rediscounting

4.1 Funds provided by SIDBI to Commercial banks by way of rediscounting of bills of SSIs which are originally discounted by a
commercial bank and rediscounted by SIDBI will be eligible for inclusion under the priority sector as indirect finance to SSI.


4.2 Funds provided by commercial banks to State Financial Corporations (SFCs) by way of rediscounting of bills of SSIs earlier
discounted by the SFCs will be eligible for inclusion under the priority sector as indirect finance to SSI.
5. Leasing and Hire Purchase

Para-banking activities such as leasing and hire purchase financing undertaken departmentally by bank will be classified as
priority sector advances, provided the ultimate beneficiary satisfies the criteria laid down by RBI for treating such advances as
advances to priority sector.


SECTION IV

COMMON GUIDELINES/INSTRUCTIONS for LENDING TO SSI sector

1. Based on the recommendations made by the Working Groups and High Powered Committees, appointed by the Government
of India and the Reserve Bank of India, a set of comprehensive guidelines to be followed for advances to all categories of
borrowers in the SSI sector were evolved.


2. Processing of Applications

2.1. Issue of Acknowledgement of Loan Applications

Bank should give acknowledgement for loan applications received from the borrowers towards this purpose, while getting fresh
stocks of application forms printed, it may be ensured that these forms have perforated portion for acknowledgement to be
completed and issued by the receiving branch. Each branch may affix on the main application form as well as the
corresponding portion for acknowledgement, a running serial number. While using the existing stock of application forms till
then, an acknowledgement (separately prepared) should be given for each application, care being taken to ensure that the
serial number given on the acknowledgement is also recorded on the main application.


2.2. Disposal of Applications

All loan applications for SSI up to a credit limit of Rs.25,000/- be disposed of within 2 weeks and those up to Rs.5 lac within 4
weeks and those above Rs.5 lac. within 8 to 9 weeks provided the loan applications are complete in all respects and
accompanied by a ‘check list’.


2.3. Register of Rejected Applications

A register should be maintained at branch wherein the date of receipt, sanction/rejection/ disbursement with reasons therefore
etc., should be recorded. The register should be made available to all inspecting agencies.


     1.   Rejection of applications for fresh limits/enhancement of existing limits should not be done without the approval of
          the next higher authority.
     2.   Sanction of reduced limits should be reported to the next higher authority immediately with full details for review
          and confirmation.


2.4 Assessment of working capital

Guiding formats for appraisal of SSI loan proposal up to Rs. 25 lac and up to Rs. 2 crore have been shown in Appendix.


2.5 Margin

15% to 25% as per H.O. guidelines and prevailing schemes of the bank.


2.6 Collaterals

No collateral security is required for SSI borrowal accounts having overall limit upto Rs. 5 lac. Bank may, however, 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.15 lac and even further increase limit upto Rs. 25 lac if CGTSI Scheme is applied to get insurance coverage.


2.7. Composite loan

A composite loan limit of Rs.1 crore can be sanctioned by banks to enable the SSI entrepreneurs to avail of their working
capital and term loan requirement through Single Window.


2.8. 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, Bank
has 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.


2.9. Revised guidelines on rehabilitation of sick SSI units (based on Kohli Working Group
recommendation)

As per the revised definition, a unit is considered as sick when any of the borrowal account of the unit remains substandard for
more than 6 months i.e. if the principal or interest remain overdue for a period exceeding one year. The requirement of
overdue period exceeding one year will remain unchanged even if the period for classification of account as substandard is
reduced in due course, 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 revised
criteria will enable Bank to detect sickness at an early stage and facilitate corrective action for revival of the unit. As per the
revised 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 Bank/Fls 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.


     1.   Interest on Working Capital Interest 1.5% below the prevailing fixed/prime lending rate, wherever applicable

     2.   Funded Interest Term Loan Interest Free

     3.   Working Capital Term Loan Interest to be charged 1.5% to 3% below the prevailing fixed/prime lending rate,
          wherever applicable.

     4.   Term Loan Concessions in the interest to be given not more than 2% (not more than 3% in the case of
          tiny/decentralized sector units) below the document rate.

     5.   Contingency Loan Assistance The Concessional rate allowed for Working Capital Assistance.


3.Mode of Disbursement of Loan


As far as possible, disbursement of loan amounts sanctioned should be made directly to the suppliers of inputs such as raw
materials implements, machinery, etc. However, Bank may continue the practice of obtaining receipts from borrowers.


4.Repayment Schedule


4.1 Repayment programme should be fixed taking into account the sustenance requirements, surplus generating capacity, the
break-even point, the life of the asset, etc., and not in an "ad hoc" manner. In respect of composite loan up to Rs.50,000/- to
artisans, village and cottage industries, repayment schedule may be fixed for term loan component only (subject to SIDBI’s
requirements being fulfilled).
4.2 In the case of other borrowers affected by natural calamities, banks may convert drawings in excess of the value of
security into a term loan repayable over a reasonable period of time and provide further working capital and extend/re-phase
the instalements due under term loans.


5.Rate of Interest


Interest shall be charged at a rate as prescribed by Head Office from time to time. Interest shall be charged on this
outstanding debit balance on working capital and on reducing balance in case of term loan.


6.Penal Interest


No penal interest should be charged by banks for loans under priority sector up to Rs.25,000/-. However, the issue of charging
penal interests that should be levied for reasons such as default in repayment, non-submission of financial statements etc.
have been incorporated in the Lending Policy of the Bank for loans above Rs.25,000/-


7. Service Charges/ Inspection Charges


               1.    No service charges/inspection charges should be levied on priority sector loans up to Rs.25,000/-

               2.    For loans above Rs.25,000/- ---- as per H.O. Guidelines.


8. Insurance against Fire and Other Risks


Table showing insurance exemption for the Category, Risk and the assets is given below:


 No.                               Category                                     Type of Risk               Type of Assets
(a)      All categories of priority sector advances upto and inclusive   Fire & Other risks     Equipment and current assets
         of Rs.10,000/-

(b)      Advances to SSI sector upto and inclusive of Rs.25,000/- by
         way of –

                                                                         Fire                   Equipment and current assets
                   Composite loans to artisans, village and cottage
                    industries
                                                                         Fire                   Equipment
                   All term loans
                   Working capital where these are against non-
                    hazardous goods                                      Fire                   Current Aeests




9. Photographs of borrowers

For the purpose of identification, branch should make arrangements for the photographs and also bear the cost of photographs
of borrowers falling in the category of Weaker Sections. Otherwise it will be borne by the borrower. It should also be ensured
that the procedure does not involve any delay in loan disbursement.


10. Amendments


These guidelines are subject to any instructions that may be issued by the RBI from time to time.


11. Annexures


A.General Guidelines on SSI Sector Landing—A - I and A - II


B.Check-list for SSI Entrepreneurs


C.Check-list for Branch Managers--- SSI Proposals


D.The guiding formats for Appraisal of SSI Loan Proposal up to Rs. 25 lac and also above Rs. 25 lac to Rs. 2 crore have been
given in Appendix.




Annexure—A - I


GENERAL GUIDELINES ON SSI SECTOR LENDING

Illustrative List of Small Scale Service and Business (Industry Related)
Enterprises (SSSBEs)

( As per circular issued by the Ministry of SSI, Government of India )


               1.    Advertising Agencies.

               2.    Marketing Consultancy

               3.    Industrial Consultancy

               4.    Equipment Rental & Leasing

               5.    Typing Centres

               6.    Photocopying centres (Xeroxing)

               7.    Industrial Photography

               8.    Industrial R & D Labs

               9.    Industrial Testing Labs

               10. Desk Top Publishing
               11. Internet Browsing/Setting up of Cyber Cafes

               12. Auto Repair, Services and Garages

               13. Documentary Films on themes like family planning, social forestry, energy conservation and commercial
                   advertising

               14. Laboratories engaged in testing of raw materials, finished products.

               15. ‘Servicing Industry’ undertakings engaged in maintenance, repair, testing or servicing of all types of
                   vehicles & machinery of any description including electronic/electrical equipment/instruments. i.e.,
                   measuring/control instruments, televisions, tape recorders, VCRs, radios, transformers, motors, watches
                   etc.

               16. Laundry & Dry-cleaning.

               17. X-Ray Clinic

               18. Tailoring

               19. Servicing of Agricultural Farm equipment, e.g., Tractor, Pump, Rig. Boring Machines, etc.

               20. Weigh Bridge

               21. Photographic Lab

               22. Blue printing and enlargement of drawing/designs facilities

               23. ISD/STD Booths

               24. Teleprinter/FAX services

               25. Sub-contracting Exchanges (SCXs) established by Industry Associations

               26. EDP Institutes established by Voluntary Associations/Non-Government Organisations

               27. Coloured, and Black & White Studios equipped with processing laboratory

               28. Ropeways in hilly areas

               29. Installation and operation of Cable TV Network

               30. Operating EPABX under franchises

               31. Beauty Parlours and Creches


(Computerized Design and Drafting, Creation of Databases suitable for foreign/Indian markets and Computer Software
Development which were hitherto being registered as SSSBE, have since been deleted from the list as Computer Software
Development and Software Services (including computer graphics, engineering design, computerized design and drafting) have
since been recognized as industrial activity eligible for registration as Small Scale industries).


Annexure—A - II


GENERAL GUIDELINES ON SSI SECTOR LENDING


Illustrative List of Activities which are not Recognised as SSSBE’s


Illustrative List of Activities which are not recognized as Small Scale Industry/ Business (Industry Related) Enterprises i.e.
SSSBE’s


               1.    Transportation

               2.    Storage (except cold storage which is recognized as SSI)

               3.    Retail/Wholesale Trade Establishments

               4.    General Merchandise Stores

               5.    Sales Outlets for Industrial Components

               6.    Health Services including pathological laboratories

               7.    Legal Services

               8.    Educational Services

               9.    Social Services
               10. Hotels




Annexure—B


CHECK-LIST FOR SSI ENTERPRENEURS


Please check whether you have covered all the following points (which are applicable) in your Application


               1.   Are you registered with Directorate of Cottage & Small Scale Industries? If so, please furnish a photocopy
                    of the same alongwith your application.

               2.   Do you have Trade Licence? If so, is it up-to-date? Please furnish a photocopy of the Current Licence
                    alongwith your application.

               3.   Do you have Sale Tax Registration? If so, is it up-to-date? Please furnish a photocopy of the same
                    alongwith your application.

               4.   Are you Income Tax Assessee? If so, please furnish a photocopy of the last Income Tax Return and a
                    photocopy of the last Income Tax Clearance Certificate alongwith your application.

               5.   Please mention in your application separately address of your Head Office, address of Registered Office,
                    address of the Factory/ Establishment/ Unit/ Centre and Home address of Proprietor or of all the Partners
                    or of all the Promoters Directors alongwith telephone, fax, mobile number and brief bio-data.

               6.   If it is a Company, please furnish a list of major shareholders of the company alongwith your application.

               7.   If it is a Partnership Firm, please furnish a photocopy of Partnership Deed (if it is a registered one, then
                    photocopy of the same) and a photocopy of partnership firm Registration Certificate alongwith your
                    application.

               8.   Please mention the names and addresses of the buyers of your major products or who obtain your services
                    or who place upon you orders for execution in your application.

               9.   Please mention the names and addresses of Firms/Units/Shops from whom you purchase major part/most
                    of your materials/components/stores & spares etc. in your application.

               10. If an existing firm/company, please furnish photocopy of last three years’ balance Sheets and Profit & Loss
                   Statements (if these are audited, please furnish audited Balance Sheet) and Projected Balance Sheet and
                   Profit & Loss Statement alongwith your application. In case of new Firm/Company, projections for
                   consecutive two years should be submitted alongwith the application.

               11. Have you made any assessment for working capital requirement and corresponding requirements of bank
                   borrowing for your projected plan/ programme? Please furnish a copy of the same alongwith your
                   application.

               12. Have you made/prepared any Project Report? If so, has it been vetted by SISI or DIC ? Please furnish a
                   photocopy of the same alongwith your application.

               13. If there is any Factory/Servicing Unit, please furnish details of machinery (portable or embedded) and
                   plants alongwith your application (name, year of purchase, make, specification, original price, present
                   book value).

               14. If the Factory/Servicing unit is housed in a rented shed/premises please furnish photocopy of rent
                   agreement or lease agreement and photocopy of current rent receipt alongwith your application.

               15. If the Factory shed or servicing station (land & building) is owned by you, please furnish proof of the same
                   alongwith your application.

               16. If rules/regulations of Pollution Control Board is applicable on you, please furnish proof whether you have
                   received/obtained necessary clearance from them.

               17. Do you maintain any bank account? If so, with whom? Please furnish details of banking arrangement you
                   are enjoying at present alongwith your application.

               18. Before submitting your application, meet the Manager/Officer in Charge of the Branch, show him the
                   application to examine whether it is in order and properly filled up. All the enclosures are attached and
                   getting checked by the Manager and then submit the application.

               19. If Manager of the Branch asks/advises you to submit some more information and documents, please
                   furnish those at the earliest and co-operate with him to enable him to dispose off your application quickly.
Annexure—C


Check-list for Branch Managers- SSI Proposals


             1.   Please interview the applicant and keep record of your conversation with the applicant.

             2.   Please examine the application and see whether it contains all relevant information.

             3.   Please check the photocopies of various documents (enclosed with the application) with the original.

             4.   Please scrutinize the application properly.

             5.   Please make inspection of the Factory/Unit/Establishment (If existing one ) and in case of a proposed one,
                  please inspect the site.

             6.   Please make local enquiries to verify the personal data furnished by the proprietor or Partners or Directors.

             7.   If the line of business (existing or proposed one) is new to you, please obtain brief particulars about the
                  scheme or line of activity from DIC or SISI or NABARD or KVIC/KVIB and get yourself acquainted with that
                  particular line of activity.

             8.   If you are unable to understand the working capital requirement assessment and corresponding bank
                  borrowing requirement, consult Regional Office (either with concerned Dy. Regional Manager or with
                  Regional Manager/Chief Regional Manager). However, in most of the cases, you should be able to assess
                  these.

             9.   Properly analyse the previous Balance Sheets and Profit & Loss account Statements (in case of existing
                  units) and projected plan vis-à-vis projected Balance Sheet and Profit & Loss Account statement. Compare
                  the date with those of other similar units. You can take the help of DIC Office or SISI or NABARD or
                  KVIC/KVIB.

             10. Examine the market demand of the product/service and assess whether the projection made by the
                 applicant is reasonable.

             11. In suitable cases, where collateral/additional securities are required to be obtained, please verify those
                 collaterals thoroughly.

             12. In case of a company and if it is already running, conduct search with the officer of Registrar of Companies
                 to ascertain whether the assets of the company are free from any encumbrance.

             13. 13.If the Firm/Company is already enjoying term loan from any Financial Institution (like SFC or
                 IDBI/SIDBI or IIBI or IDC etc.) or proposes to enjoy any loan from them, please contact them and
                 ascertain the details from them about the scheme/project/plan/proposed borrower.

             14. If the Firm/Company is already banking with any Bank, please contact the said Bank, and get detailed
                 information relating to conduct of the a/c. and also try to gather impression of the said Bank about the
                 proprietor or partners or directors as the case may be.

             15. Please go through the checklist for the SSI entrepreneurs and see whether all the points have been
                 covered in the application and whether photocopies of all relevant documents have been enclosed.

             16. If you feel that (after interviewing the applicant) some more information and documents are necessary,
                 please tell the applicant forthwith and give him specific time for furnishing those papers. Do not keep
                 pending and try to dispose of the proposal within RBI stipulated time schedule unless delayed for specific
                 reason. Do not harass the applicant and if you are satisfied, sanction the proposal (if it is under your
                 discretion) and make arrangement for disbursement after complying with all formalities. If you are not
                 satisfied, reject the proposal and after getting clearance from higher authorities, inform the applicant
                 forthwith. If the proposal has been forwarded by any sponsoring agency (like DIC, KVIC/ KVIB/ NABARD,
                 etc.), please also inform them about your decision.