The manufacturing / Service activity of the unit can smoothly progress while adequate working capital funds are available. Our Bank provides necessary working capital assistance to MSME units.

The quantum of working capital funds can be ascertained by looking into the working capital cycle of the unit.  Working Capital Cycle can be explained by way of flow chart as below:

Cash > Raw Material > Work in Process > Finished Goods > Receivables > Cash

It is normally presumed that the working capital cycle will be of three months i.e. the period taken for conversion of cash into raw material, raw material into finished goods, finished goods into receivables and receivables into cash. Depending on the nature of activity and various other factors it may be either more than 3 months or lesser than 3 months.

The working capital limits can be availed by way of cash credit, bills limit, Letter of Guarantee, Letter of Credit etc.

Security / Third Party Guarantee:

Bank will not insist for collateral security / Third Party Guarantee for total credit limits upto Rs.10 lakhs for SME borrowers.  In respect of credit limits above Rs.10 lakhs and upto Rs.200 lakhs Collateral Security / Third Party Guarantee may be waived on deserving cases and those limits will be covered under Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).

Interest Rates:

The details of interest rates for various categories of SME advances are available separately.