SBI Bank
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The document discusses various loan products and services provided by State Bank of India to small and medium enterprises (SMEs). It outlines SBI's leadership in cluster financing and customized products to meet SME needs. Key loan products discussed for term loans and working capital include term loans, cash credit, bill discounting. The document also highlights SBI's project uptech for modernization assistance and consultancy services to new entrepreneurs.
SBI Bank
- 2. State Bank of India With You – All the Way Loans to SME Units Presented by:Bipin Bhardwaj, DGM SME,SBI,NEW DELHI LHO
- 3. Cluster Financing • SBI is a pioneer and the market leader in Cluster Financing • Widest coverage with presence in almost all the clusters • Customised products for meeting the varying needs of customers • Has financed lakhs of SME units including first generation entrepreneurs
- 4. Advantages - SBI • No Collateral Security required for loans below Rs.5 lacs • Understands the needs of the units better • Wide range of products • Competitive rates of interest • Coming up with simplified Credit Scoring Models for each industry • Helps strengthen Supply Chain Linkages by catering to the needs of all the players • Availability of an experienced Technical Team
- 5. Needs Addressed Fund Based Needs: • Term Loans • Working Capital Needs • Bill Purchase • Export Credit (Packing Credit/Post shipment Credit) in rupees and foreign exchange Non-fund Based Needs: • Letter of Credit • Bank Guarantee
- 6. Term loan needs Fixed Capital Expenditure: • New Projects • Expansion • Modernisation • Technology Upgradation
- 7. Working capital needs • Finance Inventories and Receivables • Pre-shipment and Post-shipment Finance • Bill discounting
- 8. Products for Term loans • Term Loan • General Purpose Term Loan for SSIs • Open Term Loan • Car Loans
- 9. Products for WC Requirements • Cash Credit • SME Credit Plus • Standby line of Credit • Bill Purchase/discount • EPC (Export Packing Credit) • PCFC (Packing Credit in Foreign Currency) • EBRS (Export Bills Rediscount Scheme)
- 10. Customised Products • Open Term Loan • Mortgage Loan for Traders • Car Loan for SME Units • Rice Mill Plus • Dal Mill Plus
- 11. Project Uptech & Consultancy Cell Project Uptech: • Unique concept which no other bank can boast of • Helps in modernisation, cost reduction and quality assurance • 28 clusters covered:foundry, auto components, agro pumps, rice mills, glass industry and sago Activities Undertaken: • Provide Technical support • Detailed Unit level studies • Assists in preparing Business Plan
- 12. UPTECH package • To facilitate funding of upgradation projects Concessions Given: • Reduced Margins • Low interest rates • Interest free Equity fund assistance: Upto one lakh • Need based WC requirements • Assistance in implementation of technical aspects
- 13. Consultancy Cell • Provides Counselling support to first time entrepreneurs • Techno-economic feasibility • Industrial dossiers and database • Conduct industrial management programs for entrepreneurs • Entrepreneurship Development Programme
- 14. Recent Initiatives • Intensifying Cluster Financing efforts in five major industries • Pharmaceuticals • Textile • Auto ancillaries • Engg. & Fabrication • Food Processing
- 15. Recent Cluster Initiatives • Auto ancillary- Gurgaon, Pune and Chennai – Simplified scoring model to enhance Credit flow to Auto ancillary clusters across the country • Bellary Jeans Cluster identified for Project Uptech by SBI • Taken up initiatives to finance Apparel and Weaving parks – Bridge loans given to Implementation Agency for creating infrastructure facilities for the park – Loans under Group workshed scheme for setting up units – Loans under TUFS for acquiring machinery
- 16. Credit Assessment Parameters Promoter’s Qualification & Experience Financial & Operational Credibility Collaterals offered
- 17. Studies initiated so far • Textiles: Ludhiana, Bellary & Surat • Pharma: Hyderabad, Baroda & Parwada • Auto ancillaries: Gurgaon, Pune and Chennai • Food Processing: Chittoor & Krishnagiri • Engineering: Batala • Others: Sivakasi, Morvi & Khurja
- 18. SME Characteristics • SMEs: Very attractive segment for banks loyalty large number potential for profitability. • SMEs primary needs: Quick and timely availability of credit Understanding of business needs Physical proximity reliability service
- 19. TRADERS EASY LOAN Purpose • To Provide hassle free finance to borrowers in trade & services sector who are willing to furnish mortgage of property of adequate value.
- 20. Eligibility 1. Existing customers. 2. New connections including takeovers. 3. First generation entrepreneurs as well as promoters of existing units for the purpose of setting up new unit. The following categories of borrowers will be covered a) Small business enterprises b) Retail traders/wholesale traders c) Professional and Self employed
- 21. Special features of the Product • Nature of facility - Term Loan/Cash Credit. • Quantum of Loan - Minimum Rs.25,000/Maximum Rs.10.00 crores. • Interest Rate Cash Credit: @ 0.50% below SBAR Term Loan: @ 0.25% above SBAR • Repayment - upto 60 months • Security Primary: Hypothecation of stocks and receivables. Collateral: Mortgage of land & building of realizable value of 133% of loan amount
- 22. Terms and Conditions • Mortgaged Property- 65% of the realizable value of the property. (Realisable value of the property will be decided on the basis of the valuation report, which is not more than three months old, of an approved valuer). • Term Loan review, Cash Credit renewal on an annual basis, on the basis of the level of activity, credit summation in the account, the interest serviced up to the previous quarter end, and the installments paid. . • Stock statement to be submitted once at the time of execution of documents and every three months. • Insurance for the full market value of the Property to be mortgaged with Bank and comprehensive insurance for market value of assets acquired out of loan.
- 23. RESTAURANT PLUS Eligibility • Individuals (proprietorships) • Partnership firms • Corporates • Trusts (with borrowing powers) Who are owners of Restaurants or Fast food chains
- 24. State Bank of India With You – All the Way Open Term Loan
- 25. Purpose To provide term loan to the SME units with pre-approved limits for multiple needs of the organization throughout the year
- 26. Needs Addressed • Zero sanctioning time • Covers all business needs • Convenience of closing deals with suppliers instantaneously, with pre-approved limits • Liberty to decide when and how much finance required
- 27. Special features of the Product • Pre-sanctioned term loan limit up to a maximum of Rs. 250 lacs, valid for a period of 12 months • For • Addition/replacement of machinery • Building or modernizing factory • Traveling abroad • Buying new hardware/software, • Replacing tools, jigs and fixtures • Any other business related purpose • Withdrawal as per requirement • Application is required only once a year
- 28. Terms and Conditions • Maximum limit of Rs. 250 Lacs (This limit may be relaxed on case to case basis) • Loan sanctioned valid for a period of 12 months • Repayment period generally not to exceed 3 years after the end of 12 months • 10% uniform margin • Interest rates linked to credit appraisal • Simplified documentation – Based on financial statements including FFR Forms
- 29. Financing Assistance for Dealers of <<Company>>
- 30. Purpose • To provide with financial assistance to dealers of <<company>> for – Working Capital – Expansion of the Outlet/Showroom – Service station/Other facilities construction – Takeover of existing facilities with other Banks • To provide the company quicker remittance from the dealers across the country
- 31. Needs Addressed Dealer <<Company>> – Organized source of – Facilitates Expansion finance – Zero receivables – Cheaper source of – Franchisee loyalty finance – Efficient Cash – Quicker availability of Management funds – Higher Franchisee – Attractive terms and commission conditions – No float funds – Easy remittance
- 32. Facilities/Products to be offered to Dealers • Cash Credit for Working capital • LC/Bank Guarantee/Standby Line of credit over and above cash credit for special needs • Term Loan – For expansion of outlet – For construction of service centre etc. • Corporate Internet Banking (CINB) for direct remittances
- 33. Procedure for remittance of funds from dealers to Company • Dealers debits his cash credit account through CINB and authorize credit in Company’s account • Company faxes a copy of the Invoice to the Branch maintaining Dealer’s account • After the event of sale, the dealer deposits money in his CC account
- 34. Terms of Sanction • Subject to establishment of viability • Acceptable Credit rating on Credit Scoring Model • Acceptable score on Risk Matrix
- 35. Terms & Conditions of financing • Eligibility – All individuals, associations, trusts, societies, partnershi ps, corporates having dealership agreement with Company • Processing charges - 1% of the Term Loan amount (Service and other applicable taxes extra)
- 36. Advantages for Company • Same day direct credit from Dealers • MIS of payments via CINB • Pan India coverage for all dealers through single account
- 37. Advantages for Dealers • Flexible terms and conditions • CINB for bypass of Branch • Quicker organized finance availability • Easy remittances
- 38. SBI Advantage • Most experienced financer in Trade financing • Special sanctioning cells (SECC & CPC) for quicker turnaround time of sanctioning and disbursal • Account Relationship Manager for entities with more than Rs.1 crore turnover • Dedicated branch network
- 39. Check out more great forwards at vparakhiya@rediffmail.com vparakhiya@gmail.com