Bank for the purpose of lending treats “Enterprise” as a source for generation of employment (both employers & employees) in large numbers. Such enterprises are being broadly classified into –
i) Enterprises engaged in manufacture/production of goods pertaining to any industry and
ii) Enterprises engaged in providing/rendering of services.
CLASSIFICATION OF MSME SECTORS based on the original investment in plant and machinery with regard to Manufacture/production units & original investment in equipment with regard to Services units.
P & M / Equipments
Upto Rs.5 lacs
Upto Rs.2 lacs
Rs.5 lacs to Rs.25 lacs
Rs.2 lacs to Rs.10 lacs
Rs.25 lacs to Rs.500 lacs
Rs.10 lacs to Rs.200 lacs
Rs.500 lacs to Rs1000 lacs
Rs.200 lacs to Rs.500 lacs
APPLICABLE APPLICATION FORM FOR MSME ADVANCES:
Credit facilities upto Rs.10 lacs - SME 5
credit facilities over Rs.10 lacs and
upto Rs. 50 lacs - SME 6
Credit facilities over Rs. 50 lacs and
upto Rs. 200 lacs - SME 7
Credit facilities over Rs. 200 lacs – SME 8
* No collateral Security is required for advances to micro and small sector upto Rs.10 lakhs.
* The bank may on the basis of good track record and financial position of the SME units, increase the limit of dispensation of collateral requirement / third party guarantee for loans upto Rs.100 lacs subject to the same being covered under Credit Guarantee Fund Trust for Micro and Small enterprises (CGTMSE).
IOB is one of the members of Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) -
SME Loans granted without collateral security / third party guarantee is eligible to cover under CGTMSE scheme.
IOB is sanctioning loans under CGTMSE scheme
Salient features of CGTMSE scheme is given below:
a) Maximum credit Rs.100 lacs
b) Term Loan / Working Capital or both can be considered under the scheme.
c) Manufacturing & Services Sectors are eligible.
d) Guarantee cover available maximum of 75% of advance.
e) Maximum amount of guarantee cover available is Rs.62.50 lacs.
To cover loans under CGTMSE scheme, one time guarantee fee of 1% of loans upto Rs.5 lacs and 1.5% for loans above Rs.5 lacs to be paid.
Further Annual Service Fee @ 0.50% for loans upto Rs.5 lacs and 0.75% for loans above Rs.5 lacs are also to be paid.
Government of India formulated a scheme called Technology Upgradation Fund (TUFS) in 1999 for the modernisation and technological upgradation of the textile and jute industries. The Scheme provided an interest subsidy of 5% on loans availed from eligible Primary Lending Institutions and a cover for exchange fluctuation not exceeding 5% p.a. Eligible borrowers can avail the facility.