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e-Circular

SME BUSINESS UNIT.


Sl. No. : 389/2009 - 10
Circular No. : NBG/SMEBU-SME SMART/36/2009 10
Thursday,September 10,2009.
.

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)
SME BU Master Circular as on 31.03.2009
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SME BU Master Circular as on 31.03.2009


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MASTER CIRCULAR
SME SMART SCORE

STATE BANK OF INDIA


SME BUSINESS UNIT
CORPORATE CENTRE
MUMBAI

INDEX
Sr. No.
1.

Contents
Introduction
Silent Features of the Product SME Smart Score
Product Details

2.

Page No.
4
5

Formats
Annexure I Loan Application Form
Personal details

SME BU Master Circular as on 31.03.2009


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6
7

Business details

Annexure II Loan Appraisal Memorandum


IIA -Terms & conditions
IIB Assessment of loan

13
17
18

Annexure III- Credit Scoring Model


Scoring for Personal Details
Scoring for Business score
Scoring for Collateral Condition

23
24
26

Annexure IV Review/ Renewal of credit facility

3.

Review / Renewal proposal

27

Scoring model for Review / Renewal

30

List of circulars consolidated in Master Circular- Annexure V

SME BU Master Circular as on 31.03.2009


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31

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.

SME BU Master Circular as on 31.03.2009


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SME Smart Score


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
Banks norms, where the minimum marks will be nil).

Purpose

Working Capital needs & Acquisition of fixed assets

Type of
facilities
Quantum of
Finance

Cash Credit / Term Loan


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.)

Margin
Rate of Interest
(with effect
from 29.06.09)

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.
25% for working capital component and 33% for TL component.
Size of Credit Limit
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
below Rs. 25 Lacs
Rs. 25 Lacs and above
0.50 % above SBAR
1.25 % above SBAR
but up to Rs. 50 Lacs

Security:
- Primary
Hypothecation of stocks and assets financed by Bank
As per Bank's extant norms for WC and TLs
- Collateral
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.

SME BU Master Circular as on 31.03.2009


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ANNEXURE-I

LOAN APPLICATION FORM

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
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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 spouses 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.

Your Account Number/ How long are you having deposit account with SBI? What would be
the minimum balance in the account?

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 banks 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 :

SME BU Master Circular as on 31.03.2009


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Signature of Chief Promoter / Chief Executive

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

YEAR II

Tell about your factory


premises

Owned

YEAR III

Rented

Leased for over 5 years

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?

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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

Total outside liabilities


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

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YEAR II

YEAR III

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

AMOUNT

PERCENTAGE TO TOTAL

Less than 1 months old


1 to 2 months old
2 to 3 months old
More than 3 months old
Total percentage

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

WHY DO YOU WHAT IS THE COST


OF
NEED
TO BASIS
OF THE ITEM
PURCHASE
YOUR COST
THE ITEM?

Land
Building
Machinery
Other Items

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HOW
DO
YOU
PROPOSED
TO
ACQUIRE / 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


ITEM

VALUE

BASIS

TOTAL
Please tell us about your future plans

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

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What is the level of receivables you are expecting in terms of months sale?

What is the level of furnished goods inventory you are expecting to maintain in terms of
months 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 banks 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:

For and on behalf of the company

Date:

Signature of Chief Promoter / Chief Executive

SME BU Master Circular as on 31.03.2009


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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
MARKS SCORED
Personal Details
15/30
Business Details (or)
25/50
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
Facility
Existing Limits
CC(Hyp)
SME Credit Plus
TL
LC/BG (As sub limit
of CC(Hyp))
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

Rs.in lakhs
Facility
CC(Hyp)
SME Credit Plus
TL
LC/BG(As sub limit of
CC(Hyp))
Total limits

Proposed Limits

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 NPAs 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

(Rs in lakhs)
Irregularity if any

(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)

15.Performance and financial indicators:


LAST
YR.BEFORE
YEAR
LAST
Audited
Audited
31 March
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

Rs.in lakhs.
CURRENT FOLLOWING
YEAR
YEAR
Projections
Estimates

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

17. Working Capital Requirement:


Working capital limit of Rs.------ has been assessed for the year --- and Rs.----has been
assessed for the year -----, as per the Projected balance sheet method/traditional method as
per the workings as on annexure-II.
(After satisfactory review of the limits assessed for the first year, additional limits for the
subsequent year shall be released. However documents for the higher of the limits to be
obtained at the initial stage itself.)

18. Comments on conduct of Account: (covering irregularities, non-compliance, LC


devolvement, BG invocations, etc.):

Comments on Summations vis--vis sales


Period under review
Credit summations
Debit summations
Gross Sales
SME BU Master Circular as on 31.03.2009
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Opening Sundry Debtors


Closing Debtors
Comments:

19. Whether (a) the name(s) of the Individual/Directors appear(s) in RBIs list of
defaulters/RBIs list of willful defaulters & (b) the Individual/Directors name figures in
ECGCs caution list
PARTICULARS
DATE
POSITION
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
Term loan of
Total limit

Rs.
Rs.
--------------------------Rs.

On the terms and conditions as set out in Annexure-VI


Appraised & Assessed by
Signature
Name
SME BU Master Circular as on 31.03.2009
Page 17 of 17

Sanctioned by

Designation
Date
Enclosure:
Applicants 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


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TERMS AND CONDITIONS


ANNEXURE-II-A
1.
2.

Facility
Limit
Security
Primary

WC:
TL:

Collateral

3.

Personal Guarantee
(Indicate Net worth of
Guarantors with date of
compilation of opinion
reports)
Interest
CC(HYP):
(Linked to SBAR)
TL:

4.

Margin(%)

4.

Repayment

5.
6.

Validity of Sanction,
Review/Renewal
Inspection

Stocks:
Term loan:
Receivables:
Cover Period:
BG/LC (cash Margins):
CC(HYP):- Repayable on demand.
TL:
Sanction valid for two years. A review shall be made after 12
months.
Quarterly

7.

Stock Statement

To be submitted monthly.

7.

Insurance

8.

Processing fee

9.

EM Charges

10.

Commitment Charges

11.
12.
13.

Penal Interest
Documents
As per SME Documentation
Other Stipulations, if
any.

CC(HYP):Term Loan:-

SME BU Master Circular as on 31.03.2009


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SME BU Master Circular as on 31.03.2009


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ASSESSMENT OF LOAN
II-B

ANNEXURE-

Name of the Borrower:


ASSESSMENT OF WORKING CAPITAL
I. For SSI, SBF and Retail traders:
Rs.in lakhs.
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
(A)

Estimated Projected
Ist year

2nd Year

2.Assessment as per Traditional Method


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:

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Rs.in lakhs

V. i) Assessment of EPC limits:

Sr. No
1
2
3

Particulars

Estimated

Projected

Ist year

2nd year

Estimated Exports
Exports - at cost
Lead time and usance period
(includes order period / manufacturing period etc.)

4
5
6
7
8

No. Of Cycles in a year


EPC requirement per cycle
Less:- Margin on EPC %
Eligible Limit
EPC limit recommended

ii) Assessment of EBD limits:


Rs.in lakhs
Sr. No
1
2
3
4
5
6
7
8

Particulars
Estimated Exports
Exports on Usance bill basis
Usance period
Lead Time
No. of cycles in a year
Eligible EBD Facility
Limit requested by the unit
Limit recommended

iii) Brief Comments on the above limits:

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Estimated

Projected

Ist year

2nd year

VI. Assessment of Non fund based limits:


i)Assessment of LC limits:
Rs.in lakhs
Annual Raw Material purchases
Monthly Raw Material purchases
Monthly Raw Material purchases through LCs @
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

% (A)

Assessment of BG limits:
Rs.in lakhs
Outstanding BGs as on
Add: BGs 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 BGs during the period .
Requirements of BGs
Recommended BG limit
Brief comments on requirements of above limits:

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VII. Assessment of Term Loan:


1. Project Details
Project cost

Cost

Rs.in lakhs.
Margin amount
Required Bank
Finance

Margin (%)

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
finance

Debt /Equity :

of

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
(Act)

Net Profit
Depreciation
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

2
(E)

3
(E)

4
(E)

Rs.in lakhs
5
6
(E)
(E)

VIII) Term Loan assessment for Transport Operators (SRTO)


Cost of Vehicle/s
Borrowers Margin (
%)
Term loan recommended

Rs.
Rs.
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
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:

SME BU Master Circular as on 31.03.2009


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CREDIT SCORING CRITERIA

ANNEXURE-

III
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. Parameters

Maximum
marks

Age

No.of children

Owning a house

Academic qualifications

Experience in the line of trade

Spouse details

Assessed for income tax

Deposit account with SBI


(min. deposit should be
Rs.10,000/- in the period under
review)
Have life insurance policy

MARKS SCORED

30

Minimum score should be 15 marks

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Marks
Scored

Criteria

Marks

18 to 24
25 to 49
50 to 59
60 to 65
Upto 3
>3
Own
Not owning
house
Professional
Graduate/PG
Metric
Below Metric
> 5 years
2 to 5 years
< 2 years
Employed
Homemaker
Assessed
Not assessed
3 Yrs. & above
6 M to < 3 Yrs.
<6M

3
5
1
0
2
0
5
0

Yes
No

1
0

4
2
1
0
5
3
0
1
0
2
0
5
2
0

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
Maximum Marks
Criteria
Marks
No.
marks
Scored
1
Years in business
5
5 Years & over
5
3 Years to < 5
3
1 year to < 3
1
2
Continuous net profits (before
5
Last 3 years
5
tax)
Last 2 years
3
Last year
1
3
Sales show a rising trend
5
Last 3 years
5
Last 2 years
3
4
Factory premises
3
Owned or over 5
years of lease
3
Rented
0
5
Know-how
2
Specialised
2
Common
0
6
Line of activity
1
Priority Sector
1
Non priority
0
7
Competition
4
Low
4
Medium
2
High
0
8
TOL/TNW (quasi equity to be
5
2 & Below
5
added to TNW and reduced from
> 2 but upto 3
4
TOL)
> 3 but upto 4
2
> 4 but < 5
1
5
9 a Quality of receivables
5
Upto 3 months of
sales
1
> 3 but upto 4
months of sales
0
> 4 months of sales
5
9 b Quality of finished goods
5
Upto 1 month of
inventory
sales
1
> 1 but upto 2
months of sales
0
> 2 months of sales
5
10 Repayment period (not applicable
5
Upto 3 years
3
for only working capital loans)
> 3 to 5 years
0
> 5 years
5
11 Gross DSCR (not applicable for
5
> 2
2
only working capital loans
1.5 To 2
0
< 1.5
50
MARKS SCORED

SME BU Master Circular as on 31.03.2009


Page 27 of 27

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
No.
1
Branch is in the know of business
(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

Maximum
marks
10

Marks
Scored

Criteria

Marks

Yes
No

10
0

Yes
Mo

5
0

Yes
No

2
0

Availability of utilities including


labour
Firms capacity to sell the product
at the price and quantity

Easy
Ok
Good
Ok

2
0
5
0

Line of activity

1
0

TOL/TNW (quasi equity to be


added to TNW and reduced from
TOL) Competition

Quality of receivables as per


projections

Priority
Sector
Non priority
1 and below
> 1 upto 2
> 2 upto 3
>3
Upto 3
months of
sales
> 3 but upto 4
months of
sales
> 4 months of
sales
Upto 1 month
of sales
> 1 but upto 2
months of
sales
> 2 months of

4
5

8a

8b

Quality of finished goods


inventory as per projections

SME BU Master Circular as on 31.03.2009


Page 28 of 28

5
4
3
0
5
1
0

5
1
0

Repayment period (not applicable


for only working capital loans)

10

Gross DSCR (not applicable for


only working capital loans

MARKS SCORED
Minimum Marks : 25 out of 50

SME BU Master Circular as on 31.03.2009


Page 29 of 29

50 / 40

sales
Upto 3 years
> 3 to 5 years
> 5 years
> 2
1.5 to 2
< 1.5

5
3
0
5
2
0

3.

Collateral conditions:

Sr.
No.
1

Parameters
Equitable Mortgage of property :
Value of property (if TDR or
cash equivalent is offered as
security multiply cash equivalent
by 2 and add to the collateral
value) / loan amount (%)
Residential property as part of 1
MARKS SCORED

Maximum
marks
15

Marks
Scored

Criteria

Marks

75% and over


50% to <75%
25% to <50%
<25%
NIL

15
10
5
3
0

Yes
No

5
0

20

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

Appraised by
Name
Date

SME BU Master Circular as on 31.03.2009


Page 30 of 30

Approved by

RENEWAL PROPOSALS
IV

ANNEXURE-

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
2 Constitution
Proprietorship/Partnership/Private limited Company
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
Accounts as on date
(Rs. In lakhs)

Facility

Limit DP

O/S

CC
TL
LC/BG
Comments on Conduct of above accounts:

SME BU Master Circular as on 31.03.2009


Page 31 of 31

Irregularity if
any

9.Financial parameters
(Rs. In lakhs)

Year

Earlier
Estimated
(previous
year)

Actual
achieved
(previous
year)

Estimated
(Current
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
(Rs. In lakhs)

Annual Turn over estimated


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

SME BU Master Circular as on 31.03.2009


Page 33 of 33

Approved by

Credit Scoring Model for Renewal proposals


Sr.
No.
1

Parameters
Actual sales/projected
sales

Maximum
marks
10

PBT/NS (%)

10

Change in TOL/TNW
during the year

Overall conduct of the


account and working of
the unit
Credit summations in the
account during the
preceding 12 months

15

MARKS SCORED

50

10

Marks
Scored

Criteria
90% & above
70% to < 90%
50% to < 70%
Below 50%
Increasing
Flat
Decreasing
Decreasing and upto 3
Decreasing but above 3
Increasing but upto 3
Increasing but above 3
Excellent
Good
OK
90% & above
70 89%
50 69%
< 50% (% of sales)

Mar
ks
10
8
5
2
10
5
1
5
3
3
0
15
10
5
10
7
5
NIL

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

Name
Date

SME BU Master Circular as on 31.03.2009


Page 34 of 34

Approved by

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

SME BU Master Circular as on 31.03.2009


Page 35 of 35

ANNEXURE-V

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