Loan Schemes


Cottage and Small Scale Industries

Eligible borrower :

  • Individuals, partnership firms or companies engaged in the manufacture / processing / preservation of goods (including ancillary industries) whose total investment in plant and machinery does not exceed Rs. 1 crore
Security :
  • Hypothecation of Plant & Machinery/Mortgage of Industrial Shed, any tangible asset owned by loan applicant/proposed sureties, having sufficient value commensurate with the amount of loan and which are easily marketable (immovable property, deposits, LIC policies, NSCs, KVPs, vehicles, etc.)
Sureties :
  • Two
Margin :
  • As mentioned under separate sub-heading herein
Amount of Loan :
  • Upto 75% of the project cost and subject to credit exposure limit
Rate of Interest :
  • As decided by the Board and HO circulars
Repayment Period :
  • Normally 5 years maximum. However, the repayment period may be changed depending on the feasibility of the project / cash flows
Working capital limits :
  • May be allowed if found necessary
Other requirements :
  • Experience in the concerned line of activity.
  • Project Report/quotations/estimates, permission/license/approvals from competent authorities like Health Dept., Water/Electricity Dept., Municipality/Panchayat, Pollution Control Dept. – wherever applicable
  • Proof of arrangements for marketing the products of the unit
  • Copies of B/S, P/L A/c, I.T. Returns for last 3 years in case of already existing unit
Documentation :
  • Loan Application in the appropriate Form
  • Joint & Several Demand Promissory Note
  • Agreement for loan
  • Agreement for Mortgage/Hypothecation/Assignment of LIC Policies or any other tangible security acceptable to the Bank
  • Agreement for salary deduction u/s 49 of MCS Act if borrower/surety is / are salaried persons
  • Triparty Mortgage deed involving IDC, if the unit is/is to be set up in Industrial Estates set up by IDC
  • The financed unit/securities should be comprehensively insured against all possible risks
  • Letter of Continuing Security (in Form L- 4) for OD / CC limits
  • Valuation of assets to be hypothecated/mortgaged
  • Any other relevant document depending on the purpose and security of the loan