Sbi (autosaved)

Circular No. SME/MASTER/CIR-34/2009-10

7th September, 2009

All the Branches/LHOs Dear Sir/Madam, MASTER CIRCULAR SME BUSINESS UNIT LOAN PRODUCT : SME SMART SCORE We have been issuing Circulars/ Instructions containing operating instructions on the product SME Smart Score from time to time. To enable the operating functionaries to have current instructions at one place, a Master Circular incorporating all the existing Circulars/ Instructions has been prepared and is appended. We advise that this Master Circular consolidates all the previous instructions issued up to 31/03/2009 vide the circulars listed in the Annexure-V Yours faithfully, Sd/Chief General Manager (SME)

MASTER CIRCULAR SME SMART SCORE

STATE BANK OF INDIA SME BUSINESS UNIT CORPORATE CENTRE MUMBAI INDEX

SME SMART SCORE Introduction Loan approval to SMEs based on credit scores is widely prevalent in developed countries. The product “SME Smart Score” has been developed for approving loans from Rs. 5.00 lacs to Rs. 50.00 lacs under SME segment. The product is well designed and is able to generate confidence amongst the operating staff and encourage them to sanction fresh advances more confidently since it provides a well defined frame for evaluating the proposals. This product is designed to avoid delays in credit delivery due to cumbersome assessment processes. A simple Scoring Model (Annexure-III) has been designed for which all the data required has to be furnished at one go by way of an Application Form (Annexure-I) which has also been specially designed for this product. The product takes into account all the critical inputs from Circles and Learning Centres.

Silent Features of the Loan Product “SME Smart Score” �This product can be given to units in C&I, SSI and SBF segments for credit requirements between Rs.5 lacs to Rs.50 lacs (Rs.25 lacs for T&S) based on the projected turnover and / or project cost. �Assessment of Loan: The loan quantum should be a minimum of 20% of turnover and/or, 67% of project cost subject to minimum of Rs. 5 Lac. (Annexure-II) �Working Capital loans can be sanctioned for two years subject to annual review, specifying the limit requirement for each year. Documents are to be obtained for higher of the two limits. The limits assessed and sanctioned for the second year should be released after a satisfactory review of achievement of the projected level of operations for the first year. �Loan renewal: Working Capital loans can be renewed if credit score is 35 and above out of 60 under business score. (Annexure-IV) �The product is based on a set of most desirable characteristics and a set of least tolerable characteristics of a borrower. These sets have been drawn on the basis of extensive discussions with operational functionaries in circles and faculty at staff colleges. The characteristics are grouped as Personal, Business (Existing & Greenfield), Collateral and Renewal (WC). The Scoring Model for each of these is mentioned in the Annexure I attached.

Process at the level of the appraiser: i) Fill out the score sheet and calculate the score for personal, business and collateral parameters. ii) Find out the eligibility of the applicant based on total cut-off and segment wise cut-off (there is minimum score to be reached in personal and business segment) iii) If eligible, verify the responses from the supporting documents for correctness iv) Assess the limits required, repayment programme for the term loan and put up a simple note to the sanctioning authority for sanction. v) If ineligible, put up a note for rejection / or do further detailed appraisal and assessment if considered necessary on peculiar considerations.

vi) For renewal follow the same path as in. (iv) for renewal.

Target Group

Individually managed proprietary/partnership firm or closely held public/private limited companies in the Small and medium industrial and trading sector under C&I and SIB segments.

Eligibility

The chief promoter /chief executive should be 18 to 65 years of age The applicant must obtain a minimum overall score of 60% with a minimum of 50% under each sub-head like Personal details, Business details and collateral details (except in cases where collateral should be asked as per Bank’s norms, where the minimum marks will be nil).

Purpose

Working Capital needs & Acquisition of fixed assets

Type of

Cash Credit / Term Loan

facilities Quantum of Finance

MANUFACTURING UNITS: Rs.5 lacs to up to Rs.50 lacs (20% of annual turnover for WC loan and 67% of project cost for TL) TRADE & SERVICES: Rs.5lacs to Rs.25lacs (15% of annual turnover for WC and 67% of project cost for TL.) For FB and NFB single exposure limits may be sanctioned to the units. NFB facilities can be sanctioned on the best judgement basis within the discretionary powers delegated to sanctioning authority.

Margin

25% for working capital component and 33% for TL component.

Rate of Interest (with effect

Size of Credit Limit

from 29.06.09)

Repayable on

Repayable in 3 years and

demand or up to 3

above (% p.a.)

years (%p.a.) Above Rs. 5 Lacs but

@SBAR

0.75 % above SBAR

0.50 % above SBAR

1.25 % above SBAR

below Rs. 25 Lacs Rs. 25 Lacs and above but up to Rs. 50 Lacs Security: - Primary - Collateral

Hypothecation of stocks and assets financed by Bank As per Bank's extant norms for WC and TLs

Processing fees

As applicable to SSI /SBF / C&I units as per CPPD circulars

Repayment

WC loan to be renewed every two years with annual review of performance. TL not more than 5 years excluding moratorium not exceeding 6 months

Documentation

As per simplified SME documentation

Special features

A simplified appraisal model (enclosed) has been developed to standardise the appraisal process. A special application form has been designed to capture all the required information at one instance.

**Override: Units that are not able to score 60% or more marks in the scoring model will not qualify for consideration under SME Smart Score Scheme. However, such loans not approved under SME Smart Score Scheme can still be considered by the Branches under the normal credit dispensation based on specific considerations.

LOAN APPLICATION FORM ANNEXURE-I

Please fill up this form only if the answers to all the following questions are “YES”

Whether the chief promoter / Chief executive is between 18 and 65 years of age Whether the promoters are not defaulters to the banks financial institutions. Whether all the clearances including but not limited to environmental clearance for the project has been obtained / satisfactory evidence of their being made available will be provided? Whether the promoters being to the area of operation of the branch and have satisfactory references? General : Name of the Company / Firm Address (off.) (If factory and office are having different Addresses, Give the Address Nearest to the branch First) Plot/Building/Plat Name and Number

Street Name City Telephone No Mobile Fax: Address(factory): Plot/Building/Plat Name and Number

Street Name City

Telephone no. Mobile Fax Loan applied for Purpose of the Loan When and how the loan will be repaid? SME BU Master Circular as on 31.03.2009 Page 7 of 7

repaid? PERSONAL DETAILS OF THE CHIEF PROMOTER / CHIEF EXECUTIVE Name of the Chief / Promoter / Chief Executive Residential Address:

Plot/Building/Plat Name and Number Street Name City Telephone No Mobile Fax: What is your date of Birth? Let us know about your family: Are you married? What is your spouse’s occupation? How many children do you have? Your house

Owned

Rented

What is your academic qualification? Is it related to your line of trade?

Are you assessed the Income-Tax

Yes /NO if yes PAN NO.

Do you have a life insurance policy?

Do you have a life insurance policy? I certify that all incorporation furnished by me / us is true correct and complete. I have no borrowing arrangement for the company / firm with any bank except so indicated in the application form. There are no over dues / statuary dues by me or the firm / company. No legal action has been taken against me / firm / company. I shall furnish all other information that may be required by Bank in connection with my application. The Information may also be exchanged by you with any agency you may deem fit you, your representative of any other agencies as authorized by you may at any time inspect / verify my / our assets, books of account etc. In our factory business premise as give above. You may take appropriate safeguards / action for recovery of bank’s dues including publication of distributors name in

website/ submission to RBI. I further agree that my loan shall be governed by the rules of State Bank of India is may be in force from time to time.

Place :

Date :

Signature of Chief Promoter / Chief Executive

SME BU Master Circular as on 31.03.2009 Page 8 of 8

BUSINESS DETAILS Year of commencement of business State the profit / loss for the last 3 financial years

Year I

Year II

Year III

State the sales turnover for the last 3 financial years YEAR I

Tell about your factory

YEAR II

Owned

YEAR III

Rented

Leased for over 5 years

premises Tell us about your product How do you plan to produce it?

Does the product require special know how? If so, are you in possession of the know

Whether your line of activity falls under priority sector?

What are raw materials required?

How do you plan to produces them? Are they available on credit? If so what are the terms of credit?

How do you plan to ensure the quality of your product? Any special steps being taken?

What about the utilities like water power etc? Please describe the requirements and how are they met?

Whether you need skilled labour? Please describe your plants for skilled labour?

Any special reason to locate your business at the present location? Is there any advantage in procuring the raw materials locally? Is the local market big enough to subscribe the finished product of your firm? Any other advantage?

Manufacturing process in brief :

What the level of competition for the product? How do you plan to meet the competition?

Give the total outside liabilities for the last 3 years and your tangible network PARAMETER

Year I

Year II

Year III

Total outside liabilities Tangible net worth (including loans from friends and relatives) TOL / TNW

hat is the quality of your receivables? How many months’ sales do they represent? Can you give an ageing of your receivables?

age Less than one month old 1 to 2 months old 2 to 3 months old More than 3 months old Percentage

amount

Percentage to total

What is the quality of your finished goods inventory? Are they sold against order / as and when produced? Are they kept in stock for long? How many months’ sales do they represent?

What will be the time period between procurement of raw materials to realization of sale proceeds? Can you cut short the cycle without increasing your liability?

Give the details of cost and the means of finance for your project

Item

Land Buildings Macinery Other items

Why do you need to purchase the item?

What is the basis of your cost?

Cost of item

How do you proposed to aquire/procure the item

What are the means of finance?

Means

Amount

FIVE DETAILS (BANK SHOULD BE SATISFIED ABOUT YOUR ABILITY TO PROVIDE THE MARGIN)

From own sources Bank loan Friends and relatives Others Total Has the project been vetted by consultancy cell of the Bank or consultants of repute? Give details

What is the repayment period you are looking for the term loan? What will be the annual cash accruals? What will be your liability towards payment of installments and interest on term loan in a year? Whether the cash accruals will be sufficient to take care of the repayment liability?

Anything else you would like to tell about your business

What is the collateral you would be able to offer? GIVE DETAILS

What is the collateral you would be able to offer? GIVE DETAILS

ITEM

VALUE

BASIS

TOTAL Please tell us about your future plans

What is the level of sales you are projecting? Briefly describe the basis

What is the level of receivables you are expecting in terms of month’s sale?

What is the level of furnished goods inventory you are expecting to maintain in terms of month’s sale?

I certify that all information furnished by me / us is true, correct and complete. I have no barrowing engagement for the company / firm with any bank except as indicated in the application form. There are no overdues / statutory dues owed by me or the firm/company. No legal action has been taken against me / us firm / company. I shall furnish all other information that may be required by Bank in connection with my application. The Information may also be exchanged by you with any agency you may deem fit. You, your representatives of any other

agencies as authorized by you may at any time inspect / verify my / our assets, books of account etc. in our factory business promises as give above. You may take appropriate safeguards/action for recovery of bank’s dues including publication of defaulters’ name in web site/submission to RBI. I further agree that my loan shall be governed by the rules of State bank of India as may be in force from time to time.

Place:

Date:

For and on behalf of the company

Signature of Chief Promoter / Chief Executive

LOAN APPRAISAL ANNEXURE-II ASST GENERAL MANAGER / CHIEF MANAGER: - FOR SANCTION

APPRAISAL MEMORANDUM UNDER SME SMART SCORE Branch: SEGMENT

:

C&I / SSI / SBF (Micro/Small Enterprises)

The proposal conforms to the extant instructions of the scheme. The scores awarded under credit scoring criteria are as under SEGMENT

MIN. SCORE

Personal Details

15/30

Business Details (or)

25/50

MARKS SCORED

Greenfield ventures

Collateral Conditions

10/20

Total Score

50/100

(To be eligible under the scheme, the unit should get a minimum score of 60% with a minimum of 50% under each sub-head) 1. PROPOSAL FOR I. Sanction of a. b. II. Approval for c. d. III. Confirmation of e. 2. Details of Credit limits Rs.in lakhs Facility Existing Limits Facility Proposed Limits CC(Hyp)

CC(Hyp)

SME Credit Plus

SME Credit Plus

TL

TL

LC/BG (As sub limit

LC/BG (As sub limit

of CC(Hyp))

of CC(Hyp))

Total limits

Total limits

3.Name of the Borrower 4.Name of Proprietor /Partners/Directors 5.Address Factory Office SME BU Master Circular as on 31.03.2009 Page 14 of 14

6.Constitution

Proprietorship/Partnership/ Private Limited Company

7.Line of activity 8.Year of Incorporation 9.Banking with SBI since 10.IRAC Status 11.Details of Associate Concerns/Family Concerns and their Bankers Any NPA’s among associates? 12.Date of last sanction (not applicable for fresh exposures) 13. Position of the account as on Facility Limit M.V

A.V

D.P

O/S

(Not applicable for new units) 14. Brief background & History :-( to be brief and in bullet points only) (Comments on management, products, tie-up arrangement if any, quality approvals/certifications etc)

(Rs in lakhs) Irregularity if any

15.Performance and financial indicators: Rs.in lakhs. 31 MARCH YR.BEFORE LAST

CURRENT

FOLLOWING

LAST

YEAR

YEAR

YEAR

Audited

Audited

Estimates

Projections

Domestic Sales Export Sales Net Sales Profit After Tax PAT/ Net Sales (%) Cash Accrual Paid Up Capital TNW TOL/TNW(times) Current Ratio SME BU Master Circular as on 31.03.2009 Page 15 of 15

Comments on Financials ;( Brief bullet points only)

16.Term Loan: Project Details

Project Cost Rs. Bank Loan Recommended Rs. (As per assessment in annexure-III)

Debt /Equity Comments:

19. Whether (a) the name(s) of the Individual/Directors appear(s) in RBI’s list of defaulters/RBI’s list of willful defaulters & (b) the Individual/Directors name figures in ECGC’s caution list PARTICULARS LOCATION DATE RBI Willful Defaulters list(Non-Suit Filed)Rs.25lacs and Above CIBIL List(Suit filed) Rs.25 lacs and above ECGC specific approval list 20. Comments on I&A and other audit reports, which have an impact on credit risk on the unit:, if any: Name of report Date of report Serious irregularities/ Adverse features remaining unattended Comments in last I&A report & its present status

Company's audited Balance Sheet (Qualifications) 21. If the unit has scored less than 60% marks in any of the individual parameters in SME Smart Score, please comment critically on those parameters (even though the aggregate score may be more than 60%)

22. Recommendations; Recommended for sanction of Working Capital limit of Rs. Term loan of Rs. --------------------------Total limit Rs. On the terms and conditions as set out in Annexure-VI Signature Appraised & Assessed by Name Designation

Sanctioned by

Date Enclosure: Applicant’s application.& others Statement of Credit Score arrived as Annexure -I. Controlled by Signature Name Designation Date

SME BU Master Circular as on 31.03.2009 Page 18 of 18

1.

TERMS AND CONDITIONS ANNEXURE-II-A Facility

Limit

2.

Security Primary

WC: TL:

Collateral Personal Guarantee (Indicate Net worth of Guarantors with date of compilation of opinion reports)

3. 4.

Interest

CC(HYP):

(Linked to SBAR)

TL:

Margin(%)

Stocks:

Term loan:

Receivables: Cover Period: BG/LC (cash Margins):

4.

REPAYMENT

CC(HYP):- Repayable on demand. TL:

5.

Validity of Sanction, Review/Renewal

Sanction valid for two years. A review shall be made after 12 months.

6.

Inspection

Quarterly

7.

Stock Statement

To be submitted monthly.

8.

Insurance

9.

Processing fee

10.

EM Charges

11.

Commitment Charges

CC(HYP):Term Loan:-

12.

Penal Interest Documents

13.

As per SME Documentation

Other Stipulations, if any.

ASSESSMENT OF LOAN ANNEXUREII-B Name of the Borrower: ASSESSMENT OF WORKING CAPITAL I. For SSI, SBF and Retail traders: 1.Projected Turnover Method (Nayak Committee Method) for SSI a. Estimated Sales for the Current year b. Working capital required (25% of ‘a’) Eligible Bank Finance (80% of ‘b’) Bank finance Required

2.Assessment as per Traditional Method

(A)

Estimated Ist year

Rs.in lakhs Projected 2nd Year

Estimated Purchases in the current Year Estimated Average Raw Material Holding at any time (Calculated at cost of Purchases) Estimated Average holding of Stock in process and Finished goods at any one time (calculated at cost of Production) Estimated Average Receivable outstanding at any one time Total Requirement Less estimated average credit enjoyed on purchases Less estimated average credit enjoyed on purchases Less Other Sources like unsecured loans, plough back of profits Etc Bank Finance Required (B) Working Capital Assessed/recommended A or B above which ever is higher i.e II.For Self Employed and Professionals 50% of Gross annual income as declared in their Income Tax return. III.Comments on Production aspects: (covering location advantages, availability of raw material and other utilities like water, power, fuel, labour etc. IV.Brief Comments on Marketing Aspects: V. i) Assessment of EPC limits:

Rs.in lakhs

Sr. No

Particulars

1

Estimated Exports

2

Exports - at cost

3

Lead time and usance period

Estimated

Projected

Ist year

2nd year

Estimated

Projected

Ist year

2nd year

(includes order period / manufacturing period etc.)

4

No. Of Cycles in a year

5

EPC requirement per cycle

6

Less:- Margin on EPC – %

7

Eligible Limit

8

EPC limit recommended

ii) Assessment of EBD limits: Sr. No

Particulars

1

Estimated Exports

2

Exports on Usance bill basis

3

Usance period

4

Lead Time

5

No. of cycles in a year

6

Eligible EBD Facility

7

Limit requested by the unit

8

Limit recommended

iii) Brief Comments on the above limits: SME BU Master Circular as on 31.03.2009 Page 22 of 22

VI. Assessment of Non fund based limits: i)Assessment of LC limits: Annual Raw Material purchases Monthly Raw Material purchases Monthly Raw Material purchases through LC’s @ % (A) Average Usance Period (B) Lead Time and transit period (C) Total of ‘B’ and ‘C’ (D) LC limits required (= A X D) Recommended LC Limits Assessment of BG limits: Outstanding BGs as on Add: BG’s required during the next 12 months, as under 1.Earnest Money deposit 2.Security Deposit 3.Advance Payment BG 4.Retention Money Deposit/Maintenance Guarantee 5. Guarantees on account of sales tax, commercial tax and excise duty payments Less: Estimated maturity/cancellation of BG’s during the period . Requirements of BG’s Recommended BG limit Brief comments on requirements of above limits:

Rs.in lakhs

VII. Assessment of Term Loan: 1. Project Details Project cost Cost Margin (%)

Rs.in lakhs. Margin amount

Land &Buildings Plant& Machinery WC margin Contingencies Total project cost Means of finance Own funds Borrowings from friends and relatives Bank finance Others Total means of

Debt /Equity :

Required Bank

Finance

finance

3. Details of capital expenditure i.e land and factory building as well as machinery proposed to purchase: 4. Remarks on cost of project & means of finance (in brief) 5. Term Loan Assessment: Years 1 2 (Act)

(E)

3

4

(E)

(E)

Rs.in lakhs 5

Net Profit Depreciatio n Cash Accruals Repayment obligations (including Interest) DSCR Average DSCR 6. Project implementation schedule: 7. Comments on Commercial viability: SME BU Master Circular as on 31.03.2009 Page 24 of 24

VIII) Term Loan assessment for Transport Operators (SRTO) Cost of Vehicle/s Rs. Borrower’s Margin ( %) Rs. Term loan recommended Rs. Assessment: Earnings 1

Total No. of Kilometers to be run per day (estimated)/ No. of trips per day

2

Earnings per Km / earning per trip

(E)

6 (E)

3

No. of working days in a month

4

Total monthly earnings 1 x 2 x 3 …..A Expenses

5

Cost of Fuel per litre

6

Quantity of fuel required per month

7

Cost of fuel per month

8

Monthly Wages / batta for driver / cleaner etc

9

Maintenance

10

Repair

11

Insurance (annual premium / 12)

12

MV Tax (annual tax /12)

13

Interest on borrowings

14

Sustenance

15

Other expenses Total Monthly Expenses (5 to 15)….B

16

Monthly surplus …. A - B

17

Monthly TL repayment

18

DSCR 16/17

Brief details of above workings:

CREDIT SCORING CRITERIA ANNEXUREIII Name of the Company / Firm

:

Name of the chief promoter / chief executive: (in case of partnership concerns, where the partners are having equal stake, the personal profile of the active promoter as decided by the concern could be taken)

1.

Personal details :

Sr.No.

1

2

Parameters

Age

No. Of children

Maximum

Marks

marks

Scored

5

2

Criteria

Marks

18 to 24

3

25 to 49

5

50 to 59

1

60 to 65

0

Upto 3

2 0

>3 3

Owining a house

5

Own Not owning

5 0

house 4

Academic qualifications

4

Professional Graduate/PG Metric

4 2 1 0

Below Metric 5

Experience in the line 5 of trade

> 5 years 2 to 5 years

5 3 0

< 2 years 6

Spouse details

1

Employed Homemaker

7

Assessed for income tax

2

Assessed

1 0 2

8

Deposit account with SBI

5

Not assessed

0

3 Yrs. & above

5 2 0

6 M to < 3 Yrs.

(min. deposit should be Rs.10,000/- in the period under

<6M

review) 9

Have life insurance policy

1

MARKS SCORED

30

Yes No

1 0

Minimum score should be 15 marks

SME BU Master Circular as on 31.03.2009 Page 26 of 26

2. Business Score : 2.(i) For existing units which have not so far availed any loan from the Bank. If takeover from another Bank, takeover norms, prescribed by the bank are to be first evaluated and fulfilled. Sr.

Parameters

No.

1.

Years in business

Maximum

Marks

marks

Scored

5

Criteria

Marks

5 Years & over

5 3 1

3Years to < 5 1 year to < 3 2.

Continuous net profits (before

5

Last 2 years

tax) 3.

4.

Last 3 years

5 3 1

Last year

Sales show a rising trend

5

Factory premises

3

Last 3 years Last 2 years Owned or over 5 years of lease Rented

5 3 3 0

5.

Know-how

2

Specialised Common

6.

Line of activity

1

Priority Sector Non priority

7.

Competition

4

Low Medium

2 0 1 0 4 2 0

High 8.

9a.

TOL/TNW (quasi equity to be

5

2 & Below > 2 but upto 3

added to TNW and reduced from

> 3 but upto 4

TOL)

> 4 but < 5

Quality of receivables

5

Upto 3 months of

5 4 2 1

5

sales > 3 but upto 4

1

months of sales > 4 months of sales 9b.

Quality of finished goods

5

inventory

0

Upto 1 month of

5

sales

1

> 1 but upto 2

0

months of sales > 2 months of sales 10.

Repayment period (not applicable for only working capital loans)

5

Upto 3 years > 3 to 5 years > 5 years

5 3 0

11.

Gross DSCR (not applicable for

5

>2 1.5 To 2

only working capital loans MARKS SCORED

5 2 0

< 1.5 50

Items 10 & 11 are not applicable for working capital loans alone. In that case the score should be normalized for 50 (marks scored/40)*50 Minimum score should be 25 2(ii). For Greenfield ventures : Sr. Parameters

Maximum

Marks

No.

marks

Scored

1.

Branch is in the know of business

Criteria

Marks

10

Yes No

10 0

5

Yes No

5 0

(includes cases where the project is appraised by consultants of repute) 2.

Manufacturing/servicing/trading process is well known to applicant to produce/service/trade the required quality and quantity of the product

3.

Location advantage

2

Yes No

2 0

4.

Availability of utilities including

2

Easy Ok

2 0

Firm’s capacity to sell the product 5

Good Ok

5 0

Priority

1 0

labour 5.

at the price and quantity 6.

Line of activity

1

Sector Non priority 7.

TOL/TNW (quasi equity to be

5

1 and below

added to TNW and reduced from

> 1 upto 2

TOL) Competition

> 2 upto 3

5 4 3 0

>3 8a.

Quality of receivables as per

5

Projections

Upto 3

5

months of sales

1

> 3 but upto 4 months of

0

sales > 4 months of Sales 8b.

Quality of finished goods

5

inventory as per projections

Upto 1 month

5

of sales

1

> 1 but upto 2 months of

0

sales > 2 months of 9.

Repayment period (not applicable

5

for only working capital loans)

Upto 3 years > 3 to 5 years

5 3 0

> 5 years sales 10.

Gross DSCR (not applicable for

5

>2

5 2

only working capital loans

1.5 to 2

0

< 1.5 MARKS SCORED

50 / 40

Minimum Marks : 25 out of 50

SME BU Master Circular as on 31.03.2009 Page 29 of 29

3. Collateral conditions: Sr.

Parameters

No.

1.

Maximum Marks marks

Equitable Mortgage of property : Value of property (if TDR or

15

Criteria

Marks

75% and over

15

50% to <75%

10

25% to <50%

5

Scored

cash equivalent is offered as

<25%

3

NIL

0

Yes

5

No

0

security multiply cash equivalent by 2 and add to the collateral value) / loan amount (%) 2.

Residential property as part of 1

5

MARKS SCORED

20

Minimum Marks are 10 (except in cases where Collateral should not be asked as per Bank’s norms, where the minimum marks will be NIL)

Appraised by

Approved by

Name Date

SME BU Master Circular as on 31.03.2009 Page 30 of 30

RENEWAL PROPOSALS ANNEXURE-IV \ FORMAT FOR ANNUAL REVIEW /RENEWAL OF LOANS SANCTIONED UNDER SME SMART SCORE

PROPOSAL FOR REVIEW OF WC AND TERM LOAN SANCTIONED UNDER ‘SME SMART SCORE' SCHEME. 1.Name of the unit Proprietorship/Partnership/Private limited Company 2 Constitution 3.Name of the Proprietor/partners/ /directors 4. Business Address Phone/Cell No. 5.Nature of activity 6. a).Date of Last Sanction/review b) Sanction is Valid up to 7. IRAC Position as on 8.Present Position of

Facility Limit

Accounts as on date

CC

(Rs. In lakhs)

TL

DP

O/S

Irregul

LC/BG

Comments on Conduct of above accounts:

SME BU Master Circular as on 31.03.2009 Page 31 of 31

9.Financial parameters (Rs. In lakhs)

Year

Earlier Estimated (previous year)

Actual

Estimated

achieved

(Current

(previous

year)

year)

Net sales PBT Cash Accrual TNW TOL/TNW CR

Comments( to be commented on actuals for deviations over estimates, if any) 9. Conduct of WC a/c

Annual Turn over estimated

(Rs. In lakhs)

Annual Credit Summations in the account Rs. Value of the account: (Interest/Exchange/commission Booked) Cross selling Products Booked :

Rs.

Rs.

(Give the name of the products booked) Retail Business Booked Number of retail loans and amount booked for the promoters/employees 10. Whether earlier sanction terms complied with. 11. Whether irregularities observed in I&A report rectified.? If not present status 12.Other Comments ( from Risk Angle) (On associates, conduct of accounts,

Competition,

quality of products, CIBIL report for individuals or corporate as applicable etc., and other relevant risks. Bullet points only)

SME BU Master Circular as on 31.03.2009 Page 32 of 32

14. Recommendations

:

The Conduct of WC loan and Term loan has been reviewed and found satisfactory. The Credit Score for renewal of limits is as per annexure –I, is satisfactory. 1.Recommended for continuation of Working Capital limit of Rs. 2. Recommended for release of additional working capital limit of Rs. as per the original sanction on (give date) for the projected year-----

On the above terms and conditions as already set out in the original sanction dated—

Appraised by

Approved by

Signature Name Designation Date

SME BU Master Circular as on 31.03.2009 Page 33 of 33

Credit Scoring Model for Renewal proposals Sr.

Parameters

Maximum Marks

Criteria

Marks

No.

1.

marks

Actual sales/projected

10

90% & above

10

70% to < 90%

8

50% to < 70%

5

Below 50%

2

Increasing

10

Flat

5

Decreasing

1

Decreasing and upto 3

5

Decreasing but above 3

3

Increasing but upto 3

3

Increasing but above 3

0

Excellent

15

account and working of

Good

10

the unit

OK

0

90% & above

10

account during the

70 – 89%

7

preceding 12 months

50 – 69%

5

< 50% (% of sales)

NIL

sales

2.

3.

PBT/NS (%)

Change in TOL/TNW

10

5

during the year

4.

5.

Scored

Overall conduct of the

Credit summations in the

Marks scored

15

10

50

Minimum Marks should be 30/50 Veto Power if the account is unsatisfactorily conducted i) cheques are frequently returned ii) debit balance (outstanding) is over the drawing power for over 160 days in the year iii) non-compliance of critical terms and conditions (frequent devolvement of LCs and invocation of guarantees/non receipt of stock statements etc. have not been mentioned as they would be reflected in ii)

Appraised by

Approved by

Name

CIRCULAR REFERENCES

PDM/264 dated February 13, 2002 PDM/Circular no. 1 of 2003-04 dated April 3, 2003 SME/SV/Cir-15 /2005-06 dated December 21, 2005 SME/SV/Cir-23 /2005-06 dated March 25, 2006 Sme /knp/ 714 dated December 7, 2007 Sme /knp/ 1116 March 28, 2008

ANNEXURE-V

SME BU Master Circular as on 31.03.2009 Page 35 of 35