Andhra Bank
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FAQs - MSME
 
  What is MSME?

MSME Stands for Micro, Small and Medium Enterprises as per MSMED Act, 2006..

 
  How are the enterprises under MSME classified?

Enterprises under MSME categorized in two categories basing on the activity i.e. Manufacturing and Service.
 
  What is Micro Enterprises (Manufacturing)?

A micro enterprise (manufacturing) is an enterprise where investment in plant and machinery does not exceed Rs.25 lakh.

 
  What is Micro Enterprises (Service)?

A micro enterprise (service) is an enterprise where the investment in equipment does not exceed Rs.10 lakh.

 
  What is Small Enterprises-Manufacturing?

A small enterprise (manufacturing) is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.

 
  What is Small Enterprises (Service)?

A small enterprise (service) is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore.
 
  What is Medium Enterprises (Manufacturing)?

A medium enterprise (manufacturing) is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.
 
  What is Medium Enterprises (Service)?

A medium enterprise (service) is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs.5 crore.
 
  What is ceiling for sanction of Collateral Free loans to Micro and Small Enterprises?


Loans with credit limit upto Rs.10 lakhs under Micro and small enterprises are eligible for sanction without collateral security and third party guarantee.

This is applicable for Micro and Small Enterprises loans sanctioned under Prime Minister’s Employment Generation Programme (PMEGP) also.

 
  What are Composite Loans under Micro and Small Enterprises?

Composite Loans are for providing working capital and term loan through a Single Window with limits upto Rs.1.00 crore.
 
  What is LUCC?


LUCC stands for Laghu Udhyami Credit Card. It is to meet the credit requirements of Small Business, Retail traders, Professional and self employed persons, Artisans & Village Industries, Micro and small enterprises.

All existing customers with satisfactory dealings for the last two years.

Maximum upto Rs.10.00 lakhs per borrower.

 
  What are the criteria for loans under Khadi & Village Industries (KVI) sector?

All units in Khadi & Village Industries sector irrespective of their size of operations and location and amount of original investment in plant & machinery are eligible.
 
  How loans are priced?


The loans are priced basing on Internal Credit rating models for different sizes of loans.

The rates are linked to Base Rate and interest spread which are subject to revision from time to time.

 
  What is CGTMSE?

For units located in areas other than North eastern Region- For credit facility up to Rs.5.00 lakhs- Guarantee fee @1% and for credit facility above Rs.5.00 lakhs- Guarantee fee @1.50% For units located in North Eastern Region- Guarantee fee @0.75% up to Rs.50 lakh and @1.50% above Rs.50 lakh to Rs.100 lakh.
 
  What is Annual Service Fees payable?


The applicable rate is 0.50% in the case of credit facilities up to Rs. 5.00 lakhs,

And 0.75% in the case of credit facilities above Rs. 5.00 lakhs, on the amount of credit facility sanctioned in the borrower account.

 
 What is CLCSS?

Credit Linked Capital Subsidy Scheme for Technology Up gradation of the Micro and Small enterprises (Manufacturing).
 
  What is ceiling on capital subsidy under CLCSS?

Capital subsidy is 15% of eligible plant & machinery subject to maximum of Rs.15.00 lakhs
 
  What are types of the units covered under CLCSS scheme?

  • Units going for up gradation with state of the art technology with or without expansion.
  • New units setting up facilities only with the appropriate and proven technology.
 
  What is BCSBI?

BCSBI stands for Banking Codes and Standard Board of India (BCSBI).

It has formulated a code of Bank’s commitment to Micro and Small Enterprises.

This is a voluntary Code, which sets minimum standards of banking practices for banks to follow when they are dealing with Micro and Small Enterprises (MSEs) as defined in the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.