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)

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

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

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 SMEs
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)
TABLE OF CONTENTS
Sr.No.
1
2

TOPIC
EXECUTIVE SUMMARY
OBJECTIVES OF PROJECT

06
07

RESEARCH METHODOLOGY

08-09

INTRODUCTION OF THE TOPIC (CGTMSE)

4.1 ROLE OF MSMEs
4.2 CREDIT FACILITIES ELIGIBLE UNDER

10
11-12
13

THE SCHEME
4.3 CREDIT FACILITIES NOT ELIGIBLE

14

UNDER THE SCHEME

4.4 GUARANTEE FEE & ANNUAL SERVICE

15

FEE
4.5 EXTENT OF THE GUARANTEE
REVIEW OF LITERATURE
BANK OF BARODA
PUNJAB NATIONAL BANK
BANK OF INDIA
CONCLUSION
SUGGESTIONS
BIBLOGRAPHY

16
17
18 - 24
25 29
30 33
34
35
36

5
6
7
8
9
10
11

1. EXECUTIVE SUMMARY
(Key Strengths)

Pg. No.

 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.

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

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

BENEFITS FROM THE STUDY:

8

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.

4. INTRODUCTION OF THE TOPIC

9

 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

4.1 Role of Micro, Small and Medium Enterprises (MSMEs)

10

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.
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
11

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.

4.2 CREDIT FACILITIES ELIGIBLE UNDER THE SCHEME:

12

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.
4.3 CREDIT FACILITIES NOT ELIGIBLE UNDER THE SCHEME:

13

 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).
4.4 GUARANTEE FEE AND ANNUAL SERVICE FEE

14

Annual Guarantee Fee

Credit
Facility

(AGF) [% p.a]
Women, Micro
Enterprises
and units in

Others

North East
Region (incl. Sikkim)
Upto Rs.5 Lakh

0.75

1.00

0.85

1.00

Above Rs. 5 Lakh

and upto Rs.100
Lakh

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.

4.5 EXTENT OF THE GUARANTEE

15

The Trust shall provide guarantee as under:

Category
Micro Enterprises

Maximum extent of Guarantee where credit facility is

Up to Rs.5 lakh

Above Rs.5

Above Rs.50 lakh up

lakh up to

to

Rs.50 lakh

Rs.100 lakh

85% of the

75% /

Rs.37.50 lakh plus

amount in

Rs.37.50 lakh

50% of amount in

default subject

default above Rs.50

to a maximum

lakh subject to overall

of Rs.4.25 lakh

ceiling of Rs.62.50

Women entrepreneurs/

lakh
Rs.40 lakh plus 50%

Units located in North

of

East Region (incl.

80% of the amount in default

amount in default

Sikkim) other than

subject to a maximum of Rs.40

above Rs.50 lakh

credit facility up to

lakh

subject to overall

Rs.5 lakh to micro

ceiling of Rs.65 lakh

enterprises
All other category of

Rs.37.50 lakh plus

borrowers

50% of amount in
75% /
Rs.37.50 lakh

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.
5. REVIEW OF LITERATURE

16

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.

6. BANK OF BARODA

17

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 setup 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

18

Type
Traded as
Industry
Founded
Founder(s)
Headquarters
Area served
Key people

Public company
BSE: 532134
Banking, Financial services
1908
Maharaja Sayajirao Gaekwad
Vadodara, India
Worldwide
S S Mundra
(Chairman & MD)
Credit cards, consumer banking,
corporate banking, finance and

Products

insurance, investment banking,

mortgage loans, private banking,

Revenue
Net income
Total assets

private equity, wealth management

. 4032.74 (In Crores)
.13452.08 (In Crores)
. 127861.71 (In Crores)

Board Of Directors
Chairman & Managing Director
Director(Shareholders)
Company Secretary
Director(PartTime NonOfficial)

S S Mundra
Maulin Arvind Vaishnav
Vinay A Shah
Satya Dev Tripathi
19

Director (Officer Employee)

Nominee (RBI)
Director (Workmen Employee)

V B Chavan
Sudarshan Sen
Vinil Kumar Saxena
Surendra Singh Bhandari

Director(Shareholders)

Rajib Sekhar Sahoo

P Srinivas

Executive Director

Sudhir Kumar Jain

Nominee (Govt)

Ranjan Dhawan
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

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
20

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 its 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

The Micro, Small and Medium Enterprises in Manufacturing and service sector are
defined as under in MSMED ACT, 2006
Particulars

Investment in Plant & Machineries

Investment in Equipment in

in case of Manufacturing Enterprises

case of Service Sector

21

Enterprises
Micro

Up to Rs. 25/- lacs

Up to Rs.10/- lacs

Enterprises
Small

Above Rs. 25/- lacs and up to Rs.500/- Above Rs.10/- lacs and upto

Enterprises

lacs

Rs.200/- lacs

Medium

Above Rs.500/- lacs and up to

Above Rs.200/- lacs and up to

Enterprises

Rs.1000/- lacs

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

Sr. No.
1.
2.
3.

Baroda Laghu Udhyami Credit Card

Baroda Artisan Credit Card
Loans under KVIC Margin Money Scheme since merged with

4.

PMRY Scheme and re-named as PMEGP Scheme

Collateral free loans under Credit Guarantee Fund Trust Scheme
22

5.
6.
7.

Composite Loans to SSI units

Loans under Technology Upgradation Fund Scheme for Textile Units
Loans under Credit Linked Capital Subsidy Scheme for Technology

8.
9.
10.
11.
12.
13.
14.
15.
16.
17.

Upgradation of Small Enterprises

Loans under National Equity Fund Scheme
Scheme for financing Energy Efficiency Projects
SME Short Term Loans
SME Medium Term Loans
Baroda SME Gold Card
Baroda Overdraft against Land and Building
Baroda Vidyasthali Loan
Baroda SME Loan Pack
Baroda Arogyadham Loan
Scheme for financing existing borrowers under SME Segment for
purchase of new vehicles.

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
23

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)

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

24

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.

Type
Traded as

Public
BSE: 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)
25

Credit cards, consumer banking,

corporate banking, finance and
Products

insurance, investment banking,

mortgage loans, private banking,

Revenue
Net income
Total assets
Owner(s)
Employees

private equity, wealth management

. 47476715/. 42159227/. 4788770363/Government of India
62,127

PUNJAB NATIONAL BANK - Micro, Small & Medium Enterprises :

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 Honble
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.

26

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.
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.

27

SME PRODUCTS

Name of the Product/Scheme

Sr. No.
1.
2.

Sarthak Udyami - Scheme for financing Micro and Small Enterprises

PNB Pragati Udyami - Scheme for financing Industry related

3.
4.
5.
6.

Services / Business Enterprises

PNB Kushal Udyami
PNB Garrage Yogana
Loans for setting up Industrial Estates
PNB Vikas Udyami - Scheme for Loans acquisition of ISO - 9000

7.
8.

Series Certification
SME Sahayog Scheme
PNB Artisan Credit Card - Scheme to provide hassle free financial

9.

support to Artisan
PNB Laghu Udyami Credit Card - A simplified Loan Delivery

10.
11.

Mechanism
Scheme for Advances to Small Road Transport Operators
Scheme for Advances to Owner-Drivers of Taxi Cars, Three Wheeler,
Station Wagons, Tempos, Etc.

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

28

 Number of Proposal Received

- 96406

Sanction Proposal Total Amount

- Rs. 442014.93 (In Lakh)

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
Industry

Public company (BSE: BOI)

Financial services
29

Founded
Headquarters
Key people

7 September 1906
Mumbai, Maharashtra, India
Vijayalakshmi R Iyer (CMD)
Commercial Banking
Retail Banking

Products

Private Banking
Asset Management
Mortgages

Revenue
Operating income
Net income

Credit Cards
243,935.0 million
53,842.3 million
24,887.1 million

BANK OF INDIA - Micro, Small & Medium Enterprises (MSME):

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 & SelfEmployed, 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/nonborrowing 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.
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 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
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.

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SME PRODUCTS

Name of the Product/Scheme

Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Star Laghu Udyami Samekit Loan

Star SME Liquid Plus
Star SME Auto Express
Star SME Contractor Credit Line
Star SME Education Plus
Star MSE Term/Demand Loan
Kisan Credit Card
BOI Shatabdi Krishi Vikas Card
Kisan Samadhan Card
Star Bhumiheen Kisan Card
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
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 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
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.
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10. SUGGESTIONS
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.

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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
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-effectivestrategies&catid=82:featureone

http://www.bankofbaroda.co.in/fin/fin_directorreport.asp

http://www.centralbankofindia.co.in/upload/obc/MainMenuEnglishLevel2_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

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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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