cgtmse mms final summer project
TRANSCRIPT
A
PROJECT REPORT
ON
FINANCING UNDER CGTMSE- STRATEGIES ADOPTED BY PNB AND BOI
SUGGEGTIONS FOR BOB
PREPARE FOR
BANK OF BARODA, BORIVALI (EAST)
MASTER OF MANAGEMENT STUDIES (MMS)
UNIVERSITY OF MUMBAI
SUBMITTED TO
SINHGAD INSTITUTE OF BUSINESS MANAGEMENT
CHANDIVALI
UNDER THE GUIDANCE OF
Mr. SUBHAS GARG – CHIEF MANAGER /
Mr. VISHALDONKALWAR – CREDIT OFFICER
SUBMITTED BY
(PRAVIN S. MALUSARE)
(BATCH 2012-14 & ROLL NO.98)
(SPECIALISATION:-FINANCE)
1
CERTIFICATE
This is to certify that PRAVIN SHANKAR MALUSARE has successfully completed
the project work as a part of academic fulfillment of Masters of Management Studies
(M.M.S.) Semester II examination.
Name : Prof. Sreelatha Guntupalli
Signature:
Date : _________________
DIRECTOR
SIBM
2
DECLARATION
I, Pravin S. Malusare of Master of Management Studies (Semester) of Sinhgad Institute
of Business Management (SIBM), hereby declare that I have successfully completed this
Project on Financing under CGTMSE – strategies adopted by PNB and BOI suggestions
for BOB in the academic year 2012 - 2014.
The information incorporated in this project is true and original to the best of my
knowledge.
_____________________________
Signature
3
ACKNOWLEDGEMENT
I am very glad to have the vocational training in Bank of Baroda. I am very thankful to
Mr. S. S. Mundra (Chairman & Managing Director) and Mr. Jayant Rao (Asst. General
Manager, Greater Mumbai Zone), Mr. Ashok K. Bajaj (Asst. General Manager, MMNR)
& Mr. Subhas Garg (Chief Manager, Borivali East Branch) who have granted me the
permission for doing summer training in The Bank of Baroda.
I am also very grateful to Mr. Subhas Garg who is a chief manager of SME’s
management department of Boriwali (E) branch, who has guided me through out my
training period. With all the necessities being fulfilled by the department and I am again
thankful to all the employees of finance and HR, Credit department who had given me
support for the work to be done during training.
Last but not least I am also grateful to my Institute Sinhgad Institute Of Business
Management(SIBM) and Director Mrs. Meera Vijay and My Project Head Mrs.
Sreelatha Guntupalli and also all the faculty members who had inspired me for doing the
summer training.
Thanking You,
Yours faithfully,
(PRAVIN S. MALUSARE)
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TABLE OF CONTENTS
Sr.No. TOPIC Pg. No.
1 EXECUTIVE SUMMARY 06
2 OBJECTIVES OF PROJECT 07
3 RESEARCH METHODOLOGY 08-09
4 INTRODUCTION OF THE TOPIC (CGTMSE) 10
4.1 ROLE OF MSMEs 11-12
4.2 CREDIT FACILITIES ELIGIBLE UNDER
THE SCHEME
13
4.3 CREDIT FACILITIES NOT ELIGIBLE
UNDER THE SCHEME
14
4.4 GUARANTEE FEE & ANNUAL SERVICE
FEE
15
4.5 EXTENT OF THE GUARANTEE 16
5 REVIEW OF LITERATURE 17
6 BANK OF BARODA 18 - 24
7 PUNJAB NATIONAL BANK 25 – 29
8 BANK OF INDIA 30 – 33
9 CONCLUSION 34
10 SUGGESTIONS 35
11 BIBLOGRAPHY 36
5
1. EXECUTIVE SUMMARY
(Key Strengths)
Bank of Baroda is a 104 years old State-owned Bank with modern &
contemporary personality, offering banking products and services to Large
industrial, SME, retail & agricultural customers across the country.
Uninterrupted Record in Profit-making and Dividend Payment.
Overseas Business Operations extend across 24 countries through 100 Offices.
Strong Domestic Presence through 4, 276 Branches.
Provides Financial Services to around 50.86 million Customers Globally.
Robust Technology Platform with 100% CBS in Indian Branches.
First PSB to receive Corporate Governance Rating (CGR-2).
Pioneer in many Customer-Centric Initiatives.
A well-accepted & recognized Brand in Indian banking industry.
Relatively Strong Presence in Progressive States likes Maharashtra.
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2. OBJECTIVES OF PROJECT:
To study and understand the concept of CGTMSE
To analyze the CGTMSE Scheme
To understand the effect of CGTMSE on banks profit
To understand the corrective measures taken by bank for CGTMSE
To analyze the CGTMSE of Bank of Baroda and get a insight on its performance
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3. RESEARCH METHODOLOGY:
Study is all about the research & analysis of credit services offered to small and medium
enterprises Study is being made for the purpose of analysis of credit services and relief to
the borrowers by the bank that the future growth of the bank by providing better services
by bank can earns more profit. Study will be carried out at Mumbai. Secondary data is
required for analysis of report. Period of the study is limited to 45 days.
The method adopted to carry out this report was based on both the primary and secondary
sources.
Primary sources:
Interaction with the Credit Officer and Chief Manager.
Personal interaction with the customers visiting to the bank.
Secondary sources:
Manuals of the bank.
Websites
Journals
Circulars
Annual Report
8
BENEFITS FROM THE STUDY:
It helps me to know more about CGTMSE Scheme and the situation of CGTMSE in
bank.
It helps me to know the strategies adopted by banks to increase the CGTMSE customer
and to understand the CGTMSE provisions norms in bank.
ANALYSIS AND REPORT WRITING:
Here I have done CGTMSE scheme analysis in PNB and BOI and used various data for
analysis purpose. And also I have written report on it.
9
4. INTRODUCTION OF THE TOPIC
CREDIT GUARANTEE FUND TRUST FOR MICRO AND SMALL
ENTERPRISES (CGTMSE)
The scheme was originally launched from August 1, 2000 known as Credit Guarantee
Fund Scheme for Small Industries (CGFSI) covering eligible credit facilities from June 1,
2000. Subsequent to the enactment of MSMED Act-2006 the Trust was renamed as
Credit Guarantee Fund Trust for Micro and Small Enterprises and scheme as Credit
Guarantee Scheme for Micro and Small Enterprises.
MSE as defined in MSMED Act 2006
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4.1 Role of Micro, Small and Medium Enterprises (MSMEs)
The role of micro, small and medium enterprises (MSMEs) in the economic and social
development of our country is well established. The MSME sector is a nursery of
entrepreneurship, often driven by individual creativity and innovation. Thus, MSMEs are
important for the national objectives of growth with equity and inclusion. The MSME
sector contributes about 9 per cent of the country's GDP, 45 per cent of the manufactured
output and 40 per cent of its exports. The overall growth in the MSME sector has been
much higher than in the large industries over the last five years.
Although Indian MSMEs are a bed rock for innovation and despite being a diverse and
heterogeneous group they face some common challenges with regard to access to
institutional credit, collateral requirements, equity capital, etc. It was against this
background that the Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGTMSE) was established with the objective of guaranteeing collateral and third party
guarantee free credit facilities so as to enable enhanced flow of credit to the MSE sector
in India.
Over the past 12 years, CGTMSE has been ably serving India's MSEs through the Credit
Guarantee Scheme by providing guarantee cover to collateral and third party guarantee
free credit facilities sanctioned by Member Lending Institutions (MLIs) to eligible MSEs.
CGTMSE has extended guarantees for loans aggregating to over Rs.38,000crore covering
approximately. CGTMSE is well placed to meet the challenges of the future.
It is heartening to note that the positive impact that CGTMSE has had on credit flow to
the MSE Sector has been recognized by the Government and the credit guarantee
framework in the country is poised for expansion with the announcement of setting up of
Credit Guarantee Funds for housing, educational loans and skill development by the
Hon'ble Finance Minister during the budget speech in Parliament.
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I take this opportunity to thank the Government of India, Reserve Bank of India, Small
Industries Development Bank of India, all Member Lending Institutions, MSE
Entrepreneurs and other national and international partner agencies for their support and
co-operation. I am sure that with the active support of all stakeholders, CGTMSE would
continue to excel by achieving higher performance parameters. I would also like to
compliment team CGTMSE for their hard work and dedication.
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4.2 CREDIT FACILITIES ELIGIBLE UNDER THE SCHEME:
The Trust shall cover credit facilities (Fund based and/or Non fund based) extended by
Member Lending Institution(s) to a single eligible borrower in the Micro and Small
Enterprises sector for credit facility not exceeding Rs.100 lakh by way of term loan
and/or working capital facilities on or after entering into an agreement with the Trust,
without any collateral security and\or third party guarantees provided that the lending
institution applies for guarantee cover in respect of credit proposals sanctioned in the
quarter April-June, July-September, October-December and January-March prior to
expiry of the following quarter viz. July-September, October-December, January-March
and April-June respectively. Provided further that, as on the material date:
The dues to the lending institution have not become bad or doubtful of recovery;
and / or
The business or activity of the borrower for which the credit facility was granted
has not ceased; and / or
The credit facility has not wholly or partly been utilized for adjustment of any
debts deemed bad or doubtful of recovery, without obtaining a prior consent in
this regard from the Trust.
For Example,
XYZ & Co. has been sanctioned the cash credit limit of Rs.5.00 lacs on 15.04.2012.The
application for the guarantee cover should be submitted by next quarter i.e. July to Sept.
quarter online latest by 30.09.2012. Credit facilities extended by more than one bank
and/or financial institution jointly and/or separately to eligible borrower up to a
maximum up to Rs.100 lakh per borrower subject to ceiling amount of individual MLI or
such amount as may be specified by the Trust.
13
4.3 CREDIT FACILITIES NOT ELIGIBLE UNDER THE SCHEME:
Any credit facility in respect of which risks are additionally covered under a
scheme operated / administered by Deposit Insurance and Credit Guarantee
Corporation or the Reserve Bank of India, to the extent they are so covered.
Any credit facility in respect of which risks are additionally covered by
Government or by any general insurer or any other person or association of
persons carrying on the business of insurance, guarantee or indemnity, to the
extent they are so covered.
Any credit facility, which does not conform to, or is in any way inconsistent with,
the provisions of any law, or with any directives or instructions issued by the
Central Government or the Reserve Bank of India, which may, for the time being,
be in force.
Any credit facility granted to any borrower, who has availed himself of any other
credit facility covered under this scheme or under the schemes mentioned in
clause (i), (ii) and (iii) above, and where the lending institution has invoked the
guarantee provided by the Trust or under the schemes mentioned in clause (i), (ii)
and (iii) above, but has not repaid
any portion of the amount due to the Trust or under the schemes mentioned in
clause (i), (ii) and (iii) above, as the case may be, by reason of any default on the
part of the borrower in respect of that credit facility.
Any credit facility which has been sanctioned by the lending institution against
collateral security and / or third party guarantee.
Any credit facility which has been sanctioned by the lending institution with interest rate
more than 3% over the Prime Lending Rate (PLR) of the lending institution.(Branches to
link this corresponding to Base Rate).
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4.4 GUARANTEE FEE AND ANNUAL SERVICE FEE
Credit
Facility
Annual Guarantee Fee
(AGF) [% p.a]
Women, Micro
Enterprises
and units in
North East
Region (incl. Sikkim)
Others
Upto Rs.5 Lakh 0.75 1.00
Above Rs. 5 Lakh
and upto Rs.100
Lakh
0.85 1.00
of sanctioned credit facility shall be paid upfront to the Trust by the institution
availing of the guarantee cover within such period as may be specified by the
Trust.
In the event of non-payment fee by the MLI within such period or any other
specified date, the guarantee under the scheme shall not be available to the
lending institution unless the Trust agrees for continuance of guarantee and
the lending institution pays penal interest on the fee due and unpaid, with effect
from the due date, at four per cent over Bank Rate, per annum, or at such
rates specified by the Trust from time to time, for the period of delay.
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4.5 EXTENT OF THE GUARANTEE
The Trust shall provide guarantee as under:
Category Maximum extent of Guarantee where credit facility is
Micro Enterprises Up to Rs.5 lakh Above Rs.5
lakh up to
Rs.50 lakh
Above Rs.50 lakh up
to
Rs.100 lakh
85% of the
amount in
default subject
to a maximum
of Rs.4.25 lakh
75% /
Rs.37.50 lakh
Rs.37.50 lakh plus
50% of amount in
default above Rs.50
lakh subject to overall
ceiling of Rs.62.50
lakh
Women entrepreneurs/
Units located in North
East Region (incl.
Sikkim) other than
credit facility up to
Rs.5 lakh to micro
enterprises
80% of the amount in default
subject to a maximum of Rs.40
lakh
Rs.40 lakh plus 50%
of
amount in default
above Rs.50 lakh
subject to overall
ceiling of Rs.65 lakh
All other category of
borrowers
75% /
Rs.37.50 lakh
Rs.37.50 lakh plus
50% of amount in
default above Rs.50
lakh subject to overall
ceiling of Rs.62.50
lakh
All proposals for sanction of guarantee approvals for credit facilities are to be rated as per
the extant guidelines wherever required and should be acceptable to Bank.
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5. REVIEW OF LITERATURE
BRAHMANANDAM, G, N., RAI, H.L., DAKSHINA MURTHY, “Financing Small
Scale Sector”. The Role of Banks” INDIAN BANKING TODAY AND TOMORROW,
The above article was prepared on the role of banks in financing the SMEs in the year.
At those times the Indian banking was not all interested in financing the SMEs, because
of their credit worthiness. Later due to changes in the industrial policy of India, the
commercial banks come forward made immense help to the growth of SMEs. This article
was written before the economic reforms taken place. Here is a gap for more analysis
about the role of the banks in the post economic reforms. BRAHMANANDAM, G, N.,
RAI, H.L., DAKSHINA MURTHY, has focused on role of banks in financing SMEs. He
also focused on how economic reforms have changed the bank role in extending credit to
SMEs. They also focused on the credit facilities available to the SMEs in the wake of
MSME act 2006.
17
6. BANK OF BARODA
Bank Of Baroda, is a Body Corporate (Nationalized Bank) constituted under The
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, with its Head
Office at Mandvi, Baroda and Corporate Office at Mumbai.
Present day Bank of Baroda is the successor of the erstwhile "The Bank of Baroda
Limited", founded in 1908 in a small town - Baroda - by the great visionary the late
Maharaja of Baroda - Sir Sayajirao Gaekwad-III. From its humble beginnings, the Bank
has grown, over the years, to emerge as an Indian Financial Powerhouse, with a network
of over 4,043 branches in India across the length and breadth of the country and 96
overseas branches/foreign offices in 25 countries across 5 continents serving a Global
customer base of over 45 million.
In tune with times and in response to the emerging market requirements, the Bank has set
up specialized branches dedicated to specific Customer segments. Bank has also set-up
specialized Retail, Corporate and SME Loan factories across the country which work on
assembly line principle to reduce turnaround time for sanction of retail and corporate
loans
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Type Public company
Traded as BSE: 532134
Industry Banking, Financial services
Founded 1908
Founder(s) Maharaja Sayajirao Gaekwad
Headquarters Vadodara, India
Area served Worldwide
Key peopleS S Mundra
(Chairman & MD)
Products
Credit cards, consumer banking,
corporate banking, finance and
insurance, investment banking,
mortgage loans, private banking,
private equity, wealth management
Revenue . 4032.74 (In Crores)
Net income .13452.08 (In Crores)
Total assets . 127861.71 (In Crores)
Board Of Directors
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Chairman & Managing Director S S Mundra
Director(Shareholders) Maulin Arvind Vaishnav
Company Secretary Vinay A Shah
Director(PartTime NonOfficial) Satya Dev Tripathi
Director (Officer Employee) V B Chavan
Nominee (RBI) Sudarshan Sen
Director (Workmen Employee) Vinil Kumar Saxena
Director(Shareholders)Surendra Singh Bhandari
Rajib Sekhar Sahoo
Executive Director
P Srinivas
Sudhir Kumar Jain
Ranjan Dhawan
Nominee (Govt) Alok Nigam
The Position as on 31st March 2013 was as under: -
Balance Sheet Size Rs. 547135.44
Total Deposits Rs. 13452.08
Net Advances Rs. 328185.76
Investments Rs. 121393.72
Net NPA 0.54%
NATURE
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The nature of the business that decide the company belongs to which industry and it helps
the many stakeholders and parties like government, NGO, etc, to decide the parameter
and other concerned issue binding to the organization, for e.g. environmental protection,
tax rate, incentives, and rules and regulations. The Bank of Baroda belongs to the service
sector, which provides various types of financial solution related to banking industry. As
Indian economy is emerging as a major services provider in the world, which can be seen
by it’s contribution in GDP of India which is closed to 55%.
VISION
It has been a long and eventful journey of almost a century across 25 countries. Starting
in 1908 from a small building in Baroda to its new hi-rise and hi-tech Baroda Corporate
Centre in Mumbai, is a saga of vision, enterprise, financial prudence and corporate
governance.
It is a story scripted in corporate wisdom and social pride. It is a story crafted in private
capital, princely patronage and state ownership. It is a story of ordinary bankers and their
extraordinary contribution in the ascent of Bank of Baroda to the formidable heights of
corporate glory. It is a story that needs to be shared with all those millions of people -
customers, stakeholders, employees & the public at large - who in ample measure, have
contributed to the making of an institution.
MISSION
“To be a top ranking National Bank of International Standards committed to augmenting
stake holders' value through concern, care and competence”
BANK OF BARODA - Micro, Small & Medium Enterprises Sector
21
The Micro, Small and Medium Enterprises in Manufacturing and service sector
are defined as under in MSMED ACT, 2006
Particulars Investment in Plant & Machineries
in case of Manufacturing
Enterprises
Investment in Equipment in
case of Service Sector
Enterprises
Micro
Enterprises
Up to Rs. 25/- lacs Up to Rs.10/- lacs
Small
Enterprises
Above Rs. 25/- lacs and up to Rs.500/-
lacs
Above Rs.10/- lacs and upto
Rs.200/- lacs
Medium
Enterprises
Above Rs.500/- lacs and up to
Rs.1000/- lacs
Above Rs.200/- lacs and up to
Rs.500/- lacs
The micro and small (service) enterprises shall include small road & water transport
operators, small business, professional & self-employed persons, retail trade i.e. advances
granted to retail traders dealing in essential commodities (fair price shops), consumer co-
operative stores and advances granted to private retail traders with credit limits not
exceeding Rs. 200/- lakh and all other service enterprises, as per the definition under
MSMED Act.
Our bank has for internal purposes given focused attention to finance all Commercial
enterprises i.e. enterprises which may be outside the purview of regulatory definition of
SME but having turnover up to Rs 150.00 crores and new infrastructure and real estate
projects where the project cost is up to Rs. 50/- crores by treating them as part of SME
segment.
SME PRODUCTS Name of the Product/Scheme
22
Sr. No.
1. Baroda Laghu Udhyami Credit Card
2. Baroda Artisan Credit Card
3. Loans under KVIC Margin Money Scheme – since merged with
PMRY Scheme and re-named as PMEGP Scheme
4. Collateral free loans under Credit Guarantee Fund Trust Scheme
5. Composite Loans to SSI units
6. Loans under Technology Upgradation Fund Scheme for Textile Units
7. Loans under Credit Linked Capital Subsidy Scheme for Technology
Upgradation of Small Enterprises
8. Loans under National Equity Fund Scheme
9. Scheme for financing Energy Efficiency Projects
10. SME Short Term Loans
11. SME Medium Term Loans
12. Baroda SME Gold Card
13. Baroda Overdraft against Land and Building
14. Baroda Vidyasthali Loan
15. Baroda SME Loan Pack
16. Baroda Arogyadham Loan
17. Scheme for financing existing borrowers under SME Segment for
purchase of new vehicles.
23
BOB have been established in almost all-major sectors in the Indian industry
such as:
Drugs & Pharmaceuticals
Auto components, Auto Ancillary units
Food and Agro based industries
Textile machineries
Dyes & intermediates
Engineering equipments
Chemicals
Defence equipments manufacturing Units
BANK OF BARODA CGTMSE PERFORMANCE AS ON 2013
Number of Proposal Received – 28679
Sanction Proposal Total Amount - Rs. 233042.00 (In Rs. Lakh)
Bank of Baroda , Borivali East Branch CGTMSE Performance F.Y.12-13,
Number of Proposal Received – 9
Number of Proposal Sanction – 6
Amount of Proposal Received – Rs.9.40 (In Crore)
Amount of Proposal Sanction – Rs. 2.40 (In Crore)
24
7. PUNJAB NATIONAL BANK
Punjab National Bank (PNB) is an Indian financial services company based in New
Delhi, India. PNB is the third largest bank in India in terms of asset size. It was founded
in 1894 as a private banking company by Lala Lajpat Rai and is currently the second
largest state-owned commercial bank in India ahead of Bank of Baroda with about 5000
branches across 764 cities. It serves over 37 million customers. The bank has been ranked
248th biggest bank in the world by the Bankers' Almanac. The bank's total assets for
financial year 2007 was about US$60 billion. PNB has a banking subsidiary in the UK, as
well as branches in Hong Kong, Dubai and Kabul, and representative offices in Almaty,
Dubai, Oslo, and Shanghai.
Bank has been a frontrunner in the industry so far as the initiatives for Financial Inclusion
is concerned. With its policy of inclusive growth and the mission “Banking for
Unbanked”, it is a matter of pride for the Bank that it has been able to cover all its 4588
villages allotted under the Swabhiman Campaign of Government of India through
Business Correspondents. Further, the Bank has also adopted 118 villages across country.
Under FI plan, the Bank has engaged Technical Service Providers (TSPs) and the
corporate Business Correspondents (BCs) for providing banking services in villages
using ICT based BC model. The village level BC agents are using Hand Held Terminals/
POS machines & smartcards. Bank has extensively used technology to reach out to those
which have remained away from formal banking set up.
25
Type Public
Traded asBSE: 532461
NSE: PNB
Industry Banking, Financial services
Founded 1895
Founder(s) Lala Lajpat Rai
Headquarters New Delhi, India
Key people K R Kamath (Chairman & MD)
Products
Credit cards, consumer banking,
corporate banking, finance and
insurance, investment banking,
mortgage loans, private banking,
private equity, wealth management
Revenue . 47476715/-
Net income . 42159227/-
Total assets . 4788770363/-
Owner(s) Government of India
Employees 62,127
PUNJAB NATIONAL BANK - Micro, Small & Medium Enterprises :
26
Bank has well defined policy for lending to Micro, Small & Medium Enterprises
(MSMEs) with built-in concessions and incentives. The operative part of the MSME
policy for the year 2013 is as under:
The Bank shall continue to lay emphasis on financing Micro, Small & Medium
Enterprises and our existing MSME credit portfolio shall be enlarged with special
focus on lending to Micro Enterprises.
Following recommendations of High Level Task Force constituted by Hon’ble
Prime Minister on Micro, Small & Medium Enterprises (MSME) Sector will be
implemented:
- Achievement of 20% year on year growth in credit to Micro and Small
enterprises.
- The share of Micro Enterprises in Micro & Small Enterprises lending be increased
to 60% by accelerating lending to Micro Enterprises.
- 10% annual growth in number of accounts of advances to Micro Enterprises.
The Bank envisages MSEs credit growth through financial inclusion by way of
collateral free and without third party guarantee lending by leveraging CGTMSE. As
per RBI mandatory guidelines, loans upto Rs.10 lakh to Micro and Small Enterprises,
which are eligible for coverage under Credit Guarantee Scheme of CGTMSE, are to be
considered on merits without accepting any collateral security / third party guarantee
and all such cases must be got covered under guarantee scheme of CGTMSE. Further,
as per Banks guidelines, MSE proposals up to Rs.100 lakh, which are eligible under
Credit Guarantee Scheme of CGTMSE, are to be sanctioned by the competent
authority without taking any collateral security/third party guarantee.
PNB is committed to Financial Inclusion and the Credit Guarantee Scheme (CGS)
offered excellent opportunity for youngsters and first generation entrepreneurs to set up
their own units without collateral security.
27
PNB providing better customer care and transparency in services, Bank has adopted the
Code of Bank's Commitment to Micro and Small Enterprises prescribed by the Banking
Codes and Standards Board of India, Mumbai.
Bank has identified MSME focus branches in addition to already existing Specialized
MSME branches. As on date there are 523 such branches (59 specialized SME branches
& 464 MSME focus branches).
Apart from extending 1.00% concessions on chargeable Interest Rate to Micro
Enterprises for loans up to Rs.25 lakh, higher Loaning Powers have been vested
to Branch Managers for directly disposing proposals at Branch Level for financing
micro enterprises under CGTMSE.
SME PRODUCTS
Sr. No.
Name of the Product/Scheme
1. Sarthak Udyami - Scheme for financing Micro and Small Enterprises
2. PNB Pragati Udyami - Scheme for financing Industry related
Services / Business Enterprises
3. PNB Kushal Udyami
4. PNB Garrage Yogana
5. Loans for setting up Industrial Estates
6. PNB Vikas Udyami - Scheme for Loans acquisition of ISO - 9000
Series Certification
7. SME Sahayog Scheme
8. PNB Artisan Credit Card - Scheme to provide hassle free financial
support to Artisan
9. PNB Laghu Udyami Credit Card - A simplified Loan Delivery
Mechanism
10. Scheme for Advances to Small Road Transport Operators
11. Scheme for Advances to Owner-Drivers of Taxi Cars, Three Wheeler,
Station Wagons, Tempos, Etc.
28
PNB have been established in almost all-major sectors in the Indian industry
such as:
Textile Industry - Technology Upgradation Fund Scheme (TUFS)
Food Processing Industry
Leather Industry – Integrated Development of Leather Sector (IDLS)
Coir industry
Cement Industries
Iron & Steel
Chemicals Industries
Paper Industries
Construction
Infrastructure
Village & Cottage Industries
PUNJAB NATIONAL BANK CGTMSE PERFORMANCE AS ON 2013
Number of Proposal Received - 96406
Sanction Proposal Total Amount - Rs. 442014.93 (In Lakh)
29
8. BANK OF INDIA
Bank of India (BoI) is an Indian state-owned commercial bank with headquarters in
Mumbai, Maharashtra. Government-owned since nationalisation in 1969, It is India's 4th
largest PSU bank, after State Bank of India, Punjab National Bank and Bank of Baroda. It
has 4187 branches as on 21 April 2012, including 52 branches outside India, and about
1679 ATMs. BoI is a founder member of SWIFT (Society for Worldwide Inter Bank
Financial Telecommunications), which facilitates provision of cost-effective financial
processing and communication services. The Bank completed its first one hundred years
of operations on 7 September 2006.
Type Public company (BSE: BOI)
Industry Financial services
Founded 7 September 1906
Headquarters Mumbai, Maharashtra, India
Key people Vijayalakshmi R Iyer (CMD)
Products
Commercial Banking
Retail Banking
Private Banking
Asset Management
Mortgages
Credit Cards
Revenue 243,935.0 million
Operating income 53,842.3 million
Net income 24,887.1 million
BANK OF INDIA - Micro, Small & Medium Enterprises (MSME):
30
All advances to segments viz. Micro, Small and Medium Enterprises in the
Manufacturing sector irrespective of sanctioned limits, (including advances
against TDRs/Govt. Securities etc for business purposes to these categories of
Borrowers), and
Advances to Services Sectors such as Retail Traders, Professional & Self-
Employed, Small Business Enterprises, and Small Road/Water Transport
Operators and other enterprises engaged in providing/rendering of services,
conforming to the above investment criteria and enjoying borrowing/non-
borrowing facilities with the Bank (including advances against TDRs/Govt.
Securities etc for business purposes to these categories of Borrowers).
Those enterprises exceeding the investment ceilings would be categorized as
Large Enterprises and be outside the purview of MSME.
The sanctioned limits would no longer be the criteria determining the status as
micro or small or medium enterprises in these cases.
As per RBI guidelines, advances made to micro & small enterprises would be
categorized as Priority sector advances whereas lending by banks to medium
enterprises will not be included for the purpose of reckoning of advances under
the priority sector
Bank inform about salient features including benefits available and charges
payable and terms of Credit Guarantee Scheme of CREDIT GUARANTEE
FUND TRUST FOR MICRO AND SMALL ENTERPRISES which is extended
31
by eligible banks and is popularly known as CGTMSE guarantee scheme for
MSEs and which is available at present to new as well as existing Micro and
Small Enterprises including Service Enterprises with a maximum credit cap of `
100 lakh (Rupees One hundred lakh) per borrower, excluding retail trade,
educational institutions, training institutes and Self Help Groups (SHGs) as per
the said Scheme.
Where a loan is eligible to be covered under any subsidy scheme in force, we will
explain to you the features of such scheme and any requirement you will need to
fulfill.
We will endeavour to conduct programmes to enhance knowledge on financial
management of prospective borrowers.
We shall endeavour to organize meetings of MSE borrowers at periodic intervals
as a regular channel for exchange of ideas and suggestions.
SME PRODUCTS
Sr. No.
Name of the Product/Scheme
1. Star Laghu Udyami Samekit Loan
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2. Star SME Liquid Plus
3. Star SME Auto Express
4. Star SME Contractor Credit Line
5. Star SME Education Plus
6. Star MSE Term/Demand Loan
7. Kisan Credit Card
8. BOI Shatabdi Krishi Vikas Card
9. Kisan Samadhan Card
10. Star Bhumiheen Kisan Card
11. Star Bhumiheen Kisan Card
BOB have been established in almost all-major sectors in the Indian industry
such as:
Textile Industry
Technology Service Industry
IT and IT-enabled services
Bio-tech and footwear services
Auto & Engineering
Printing & Packaging
Pharmaceuticals, Medical & Healthcare
Food Processing
Infrastructure
BANK OF INDIA CGTMSE PERFORMANCE AS ON 2013
Number of Proposal Received - 103778
Sanction Proposal Total Amount - Rs. 641376.64 (In Lakh)
9. CONCLUSION
33
My project report mainly involved the opportunity, credit facilities to Under CGTMSE
Scheme by the bank. The main purpose of the analysis is to know that how bank is
providing loan to CGTMSEs.
We know that today SMEs are growing and profitable sectors for banks in terms of
money investment. And BOB system of loan sanctioning is quite good. But it is very true,
in terms of the paper work that most of the SMEs are enable to submit proper documents
for approval of loan. It is also found that after sanctioning the credit facilities bank has
maximum no. of paper works, which is creating problems for SMEs to maintain all of
them.
It also found that some CGTMSE Scheme borrowers are not educated, so they are not
aware about the benefits of this scheme. Due to this they are not eligible for the
financing, and lack of finance they cannot grow.
Now a days credit guaranty scheme institutions have floated to support banks to assume
risk unhesitatingly in financing SMEs. And also more appropriate CGTMSE have been
developed to help SMEs to have easy credit with less cost and collaterals.
CGTMSE scheme is a successful in the banking industries because CGTMSE scheme for
Widening of credit portfolio, Better management of risk, Faster recovery of dues,
Enhancement of profitability and also borrowers get the benefit.
10. SUGGESTIONS
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The borrowing should be made cheaper by lowering the rate of interest on lending of
banks, which help the SMEs for coping with the high risk and costs to compete with their
competitors.
Bank should also provide consultancy services and professional guidance at the time of
setting up for considering the long term and short term financial requirements of a small
unit for lending purpose.
Bank has to increase their credit limit and also decrease the installment amount.
CGTMSE Scheme are big source of revenue for banks, so bank should encourage also
the unregistered units by providing more facilities like less paper work.
The best way to encourage lending to SMEs CGTMSEs scheme is to improve the ability
of existing institution to construct profitable and efficient lending programs.
Building awareness among small business people about the financial sources offering by
bank. Especially in the case of CGTMSEs is must. So there is mutual benefits are
possible.
While granting the loans the bank does not adhere with the margin.
The process followed by the bank in sanctioning the loan is cumbersome
(unmanageable), hence it is suggested to make the process easier in sanctioning the credit
facilities to the SMEs.
11. BIBLIOGRAPHY
35
A. Web Site:
www.bankofbaroda.co.in
http://www.cgtsi.org.in/schemes.aspx
http://www.cgtsi.org.in/about_us.aspx
http://www.iob.in/uploads/CEDocuments/loanpolicydocumentrevised.pdf
http://www.smallenterpriseindia.com/index.php?
option=com_content&view=article&id=939:sme-marketing-cost-effective-
strategies&catid=82:featureone
http://www.bankofbaroda.co.in/fin/fin_directorreport.asp
http://www.centralbankofindia.co.in/upload/obc/MainMenuEnglishLevel-
2_FAQ_CGTMSE.pdf
www.pnbindia.com
https://www.pnbindia.in/en/ui/ssi-schemes.aspx
www.bankofindia.co.in
http://www.slideshare.net/superalisha07/sme-credits
www.thehindubusinessline.com
B. Articals
Business Standard
The Times of India
Money Control
CGTMSE circular, Bank data, CGTMSE Proposal, Listen Customer and Credit officer
conversation, Visit to Punjab National Bank Goregaon East Branch, etc.
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