Priority Sector

A. Retail Trade

Eligibility and Coverage:

To be an eligible borrower, the trader must be an individual, firm or co-operative society with an annual turnover not exceeding Rs. 40 lac. Credit facility should ordinarily be allowed against readily saleable merchandise in the ordinary course without changing the product. Retail traders dealing in essential commodities (fair price shops) and consumer co-operative stores, and private retail traders with credit limits not exceeding Rs.10 lac (Retail traders in fertilizers will form part of indirect finance for agriculture and those to Retail Traders of Mineral Oils under small business) would come under PRISEC Advance.
Maximum limit up to Rs. 10 lac will be covered under Priority Sector. In excess thereof, will be treated as traditional loan and will not be termed as retail trade.

B. Small Business

Eligibility and Coverage:

Small Business would include individuals and firms managing a business enterprise established mainly for the purpose of providing any service other than professional services whose original cost price of the equipment used for the purpose of business does not exceed Rs.20 lac. Advances for acquisition, construction, renovation of house-boats and other tourist accommodation will be included here. Distribution of mineral oils shall be included under "Small Business". Advances to judicial stamp vendors and lottery ticket agents may also be classified under this category.

Limit – need-based finance may be accorded for term loan/ cash credit/ composite loan.

C. Professional And Self-Employed Persons

1. Eligibility and Coverage

1. Loans to professionals and self-employed persons include loans for the purpose of purchasing equipment, repairing or renovating existing equipment and/or acquiring and repairing business premises or for purchasing tools and/or for working capital requirements to medical practitioners including Dentists, Chartered Accountants, Cost Accountants, Practising Company Secretary, Lawyers or Solicitors, Engineers, Architects, Surveyors, Construction contractors or Management Consultants or to a person trained in any other art or craft who holds either a degree or diploma from any institutions established, aided, or recognised by Government or to a person who is considered by the bank as technically qualified or skilled in the field in which he is employed. The undernoted specific categories of advances will also be eligible for classification under this item.
    
2. Advances to accredited Journalists and Cameramen who are freelancers i.e, not employed by a particular newspaper/magazine for acquisition of equipment by such borrowers for their professional use.
      
3. Credits for the purpose of purchasing equipment, acquisition of premises (strictly for business) and tools to practising company secretaries who are not in the regular employment of any employer.
    
4. Financial assistance for running ‘Health Centre’ by an individual who is not a doctor, but has received some formal training about the use of various instruments of physical exercises.
    
5. Advances for setting up beauty parlours where the borrower holds qualification in the particular profession and undertakes the activity as the sole means of living/ earning his/her livelihood.
    
6. Preference may be given for financing professionals like doctors, etc. who are carrying on their profession in rural or semi-urban areas. The term also includes firms and joint ventures of such professional and self-employed persons. This category will include all advances granted by the bank under special schemes, if any, introduced for the purpose.
   

2. Limitation for Professional and Self-Employed Persons(PSEP)

1. Only such professionals and self-employed persons whose borrowings(limits) do not exceed Rs.10 lac of which not more than Rs. 2 lac should be for working capital requirements, should be covered under this category. However, in the case of professionally qualified medical practitioners, setting up of practice in semi-urban and rural areas, the borrowing limits should not exceed Rs.15 lac with a sub-ceiling of Rs.3 lac for working capital requirements. Advances granted for purchase of one motor vehicle to professional and self-employed persons other than qualified medical practitioners will not be included under the priority sector.
    
2. Advances granted by bank to professional and self-employed for acquiring personal computers for their professional use, may be classified in this category, provided the ceiling of total borrowings of Rs.10 lac of which working capital should not be more than Rs.2 lac per borrower, is complied within each case for the entire credit inclusive of credit provided for purchase of personal computers. However, home computers should not be treated at par with personal computers and excluded from priority sector lending.

3. The following criteria are common to the advances for Retail Traders/Small Business/Professional and Self-Employed persons.

1. Age limit - 18 to 55 years.
    
2. Educational Qualification- No bar / in case of professional and self-employed, please see C. 1 (i).
    
3. Limit – Term loan / Cash Credit/ Composite Loan as the case may be.
    
4. Margin- 25%
    
5. Interest – Existing rate of interest is given in Bank’s Circular duly updated.

Security:

Primary : Against hypothecation of assets created out of bank loan.

Additional : No collateral security is required for limit up to Rs.25,000. However, suitable collateral security may be insisted upon for limits above Rs.25,000/-.

Processing Fees/Supervision Charge/Service Charge : As per H.O. guidelines.

Insurance : Full cover of insurance is to be obtained for limits above Rs.25,000/-. Stock hypothecated to the bank shall be covered under comprehensive insurance for full value with bank clause at the cost of the borrower and the insurance policy duly assigned in favour of the bank shall be kept by the bank.

General Terms :

1. Loan application should be duly filled up by the borrower in our Bank’s standard format (copy of the format annexed).
    
2. Pre-sanction inspection is to be conducted.
    
3. Appraisal of the proposal is to be done in conformity with Bank’s lending policy.
    
4. Documents are to be properly taken and executed as per terms of sanction in our Bank’s standard loan document.
    
5. Periodical Stock Statement shall be obtained from the borrower and drawings shall be regulated according to drawing power available on the stipulated margin.
    
6. End-use of the fund is to be ensured.
    
7. Close follow-up is to be done.
    
8. Other terms and conditions as applicable in different loan accounts.