Welcome to the Uttar Bihar Gramin Bank’s MSE Loan Policy and Rehabilitation Policy. We’re here to make it easy for Micro, Small, and Medium Enterprises (MSMEs) to get the support they need.
Table of Contents
Objectives
- Our goals are simple:
- Quick and transparent access to banking services for MSMEs.
- Hassle-free credit support.
- Defining what counts as an MSME.
- Properly checking and evaluating loan requests.
- Meeting government and RBI standards.
- Backing clusters of MSMEs.
- Encouraging the credit guarantee scheme.
- Following BCSBI’s Code of Bank’s Commitment to MSE.
- Helping young entrepreneurs.
- Staying in line with government and RBI rules.
Definition of MSMEs
- In simple terms, here’s how we see MSMEs:
- In manufacturing:
- Micro: Investment up to Rs. 25 lakh.
- Small: Investment between Rs. 25 lakh and Rs. 5 crore.
- Medium: Investment between Rs. 5 crore and Rs. 10 crore.
- In services:
- Micro: Investment up to Rs. 10 lakh.
- Small: Investment between Rs. 10 lakh and Rs. 2 crore.
- Medium: Investment between Rs. 2 crore and Rs. 5 crore.
- In manufacturing:
Scope and Coverage
- Our policy covers all credit for Micro and Small Enterprises, whether they’re into making things or offering services. It also helps in the rehabilitation of businesses.
Guidelines on MSE Finance
- We figure out how much working capital you need based on your business type. For manufacturing, we have different rules for seasonal and non-seasonal businesses. When it comes to term loans, we look at technical and financial stuff, among other things.
Security Norms
- We’re here to support you, and that’s why we provide collateral-free loans up to Rs. 10 lakh. We also want to cover all MSE loans under the Credit Guarantee Scheme.
Cluster-Based Approach
- Think of this as us grouping similar businesses together to make things easier for everyone. We follow a 4 C approach – it’s all about focusing on you, keeping costs in check, cross-selling where it makes sense, and managing risks.
Common Guidelines/Instructions for Lending to MSE
- We make sure loan applications are processed on time, and we have some financial standards that MSEs should meet.
Rehabilitation of Sick MSE Units
- If your business is facing tough times, we’re here to help. We’ll look at your interest rates and loan terms and get you back on your feet.
State-Level Inter-Institutional Committee
- This group keeps an eye on what’s happening with MSMEs in the state. It’s made up of government folks and MSME associations.
Empowered Committee on MSMEs
- These committees help us keep an eye on how things are going in the MSME world. They talk to banks, financial folks, and state governments.
Debt Restructuring Mechanism for MSMEs
- If you’re a viable or potentially viable MSME but have some debt issues, we’ll help you restructure it. We want to make sure there’s enough credit flowing into the sector.
Credit Linked Capital Subsidy Scheme
- This scheme helps you upgrade your tech. It’s got rules and procedures you should check out if you’re interested.
BCSBI Code
- We follow some rules to make sure your experience with us is good. It’s all about fair banking and clear communication.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- We’re encouraged to fund you without asking for lots of extra security. The CGTMSE is there to help.
Monitoring of MSE Credit
- We keep an eye on your accounts to make sure everything’s okay. If there’s a problem, we’ll deal with it right away.
Loan Policy for MSE Sector
- Our loan policy is based on rules from the government and RBI. It can change based on their updates.
Exclusions from Investment Calculation
- Some things don’t count when we’re figuring out your investment in machinery and equipment. The Ministry of Small Scale Industries can tell you what those are.
Methodology for Assessment of Working Capital Limits
- We have two ways to figure out how much working capital you need. One is based on your expected sales, and the other looks at past and future numbers.
Diversion of Funds
- If your finances are healthy, you can invest in ways that help your business grow, as long as it doesn’t hurt your financial health.
Cash Budget Method
- We’ll ask you to give us a cash budget. It’s like a plan for your money. We’ll check it to make sure it’s realistic.
- This policy is all about making your experience with us as easy and straightforward as possible. We follow the rules, we support your business, and we’re here to help. If you have questions, just ask!
This simplified and conversational version of your MSE Loan Policy and Rehabilitation Policy should be more accessible to a broader audience. It aims to convey the key points without getting bogged down in corporate jargon and technical details.
