 Purpose |
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For working capital needs of MSME units
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| Assessment of limit |
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Depending on the Working capital requirement of the unit assessed as per Turnover Method/ MPBF System/ Cash Budget System
Drawings from the account shall be against Drawing Power arrived based on Stocks such as Raw materials, work-in-process, finished goods and Book debts.
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| Minimum Margins |
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20% to 25% in case of Stocks and 30% in case of Book debts / Receivables.
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| Security |
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Primary security: Stocks and receivables
Collateral security: Upto Rs.10 lakhs : Nil
Above Rs.10 lakhs Land &
Buildings, Plant & Machinery,
other fixed assets as per Bank norms.
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| Co-obligation/ Guarantee |
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Upto Rs.10 lakhs : Not required
Above Rs.10 lakhs : Suitable Third party guarantee as per Bank norms. |
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| Tenor of Loan |
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Limits are renewable every year
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| WORKING CAPITAL DEMAND LOAN FOR MSME UNITS |
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| Purpose |
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To meet need based adhoc working capital requirement
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| Eligibility |
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Existing MSME borrowers having overall fund based credit facility upto Rs.10 crore
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| Quantum |
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20% of the existing fund based limit
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| Margin |
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Same as existing margins to present working capital limits
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| Co-obligation/ Guarantee |
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Continuation of existing Co-obligation/Guarantee
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| Security |
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Primary: Stocks and receivables
Collateral: Continuation of existing collateral securities
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| Repayment |
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One year with a provision of moratorium of six months, during which only interest will have to be serviced
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