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Info Connect | January 2013

Central Bank of India: To provide assistance at competitive rates to MSEs

 The Micro & Small Enterprises (MSEs) Sector continue to be a vibrant sector of the Indian economy. There are over 6,500 products ranging from traditional to high-tech items, which are being manufactured by the small enterprises in India. After agriculture, the MSME provides the maximum opportunities for both self-employment and jobs in the country.  The small enterprises sector in India holds great potential for further expansion and growth in the future.  In fact, the employment potential of the sector is un-matched by any other sector of the economy.

Only 5.18 per cent of the units (both registered and unregistered) had availed of finance through institutional sources, when 2.05 per cent of the units had finance from non-institutional sources. Majority of units i.e. 92.77 per cent had no finance or depended on self-finance. Thus, the extent of financial exclusion in the sector is very high.

All stakeholders of the sector including government agencies, banks, financial institutions and other policy makers have a significant role to play in promoting inclusiveness in growth story.
Central Bank of India acknowledges the very fact and have been continuously striving hard not only to enhance credit flow to the MSE sector but also to provide the assistance at very competitive rates in order to avoid burden on the MSE units which are primarily run by first generation entrepreneurs. A separate vertical for MSME has been created for augmenting credit flow to the sector and hand holding support to MSME units.

The Bank has 535 specialised MSME branches mostly situated in industry cluster for fast and focused lending to MSME sector.

  • Bank has entered into tie up with SIDBI for loan facilitation to MSME, also with Chamber of Micro, Small & Medium enterprises for fostering credit to the MSME units.
  • Bank considers financing MSE as a thrust area. During the year, Bank has taken following initiatives for supporting MSME sector:
  • Bank has introduced Cent Business Gold loan scheme- loan against gold deposit for business purpose which is sanctioned immediately without any financials statements.
  • Bank has introduced online filing of loan application for Micro Small & Medium Enterprises.
  • Separate MSE Loan Policy introduced.
  • Simplified loan applications form and process note for MSE have been introduced.
  • Separate customer grievance redressal cell available.
  • On the eve of Bank's 102nd Foundation day bank has sanctioned loans to 1101 MSE borrowers.
  • ROI for MSE has been reduced by 200 basis points.
  • Extended interest reduction  to units obtaining better ratings under performance and credit rating of National Small Industries Corporation (NSIC) from rating agencies like CRISIL,ICRA,CARE , FITCH,BRICKWORK and ONICRA as under-
  • Concessions of 50 per cent in Processing Charges
  • Interest Concession of 0.25 per cent
  • Rationalised rate of interest for Rice Mills. Attractive interest rates if the advance is covered by 100 per cent collateral security.
  • Bank has introduced Cent Construction Equipment finance scheme on occasion of Bank's 102nd Foundation Da  
  • Bank has organised Entrepreneurship Development programmes and Symposiums in association with Dun and Bradstreet, Care Ratings, SME Chamber of India across the country.
  • Bank is celebrating 31st January 2013 as MSME Day by organising credit camp in all the branches.
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