S. No

Parameter

Scheme Guidelines

1.

  Objective

To finance contractors (Construction / Mining/ Railway /Electrical)

2.

  Eligibility

1. a) All Construction Contractors / Electricals Contractors/ Mining / Railway Contractors eligible to be classified as MSME with a valid UDYAM Registration. Minimum experience of two years.

1. b) MSME units irrespective of constitution i.e. Individuals, Proprietorship, Partnership Concern (including LLP), Limited Companies having all the necessary statutory licenses / NOCs.

1. c) Unit to avail loan under Sole Banking arrangement (Except Retail loans), however exception to be given to those borrowers availing credit facilities under Equipment Finance/ Loan Against Property (LAP)/ Commercial Vehicle loan/ Term Loan (From Government Owned Financial Institution other than PSBs/SBI) for existing business purpose.

3.

Facility/

Purpose

• Term Loan and/or Working Capital (Fund Based and Non-Fund Based)

• Working Capital facility in the form of secured Overdraft (OD) can also be extended to the Contractors.

4.

Quantum

Min: Above Rs.10 Lakh

Max: Rs.50 Crs. 

5.

Assessment

For WC facility (Fund Based / Non Fund Based): As per norms prescribed in the Loan Policy. Assessment for Overdraft facility is to be made through Cash Budget Method.

For TL facility: As per norms prescribed in Loan Policy of the Bank.

6.

Margin

FBWC: 20 % on stock & 30 % on book debts (up to 90 days). 40 % on book debts above 90 days and up to 180 days.

NFBWC: 10 % Cash Margin

Term Loan: P&M (15%) & Land/Building/Others (35%)

7.

Security

Primary: All assets created out of Bank’s finance shall be charged in favour of Bank by way of Hypothecation/ Mortgage etc.

Collateral Coverage :

a) Collateral security by way of immovable properties (Land and Building) and / or other liquid assets like NSCs /KVPs/ Deposits/assignment of LIC policies/other Govt. Securities should be obtained for the accounts sanctioned under the Scheme. Minimum collateral coverage is to be maintained as detailed below

Cash Credit : 75 %

Overdraft Facility : 100 %

Term Loan: 50 %

b) In case of BG/ LC limit minimum collateral security of 50 % of the credit exposure is to be obtained.