The National Small Industries Corporation Limited National Small Industries Corporation Limited Financial Services Manual MNL : FSC :01 Edition ... NSIC National Small Industries Corporation

FINANCIAL SERVICES MANUAL-01

Approved By: Head of F & A - on file

Issued By: Head of F & A

Date: 19.09.2014 Page 1 of 124

Edition 06, MNL:FSC:01

The National Small Industries Corporation Limited

Financial Services Manual MNL : FSC :01 Edition – 06

National Small Industries Corporation Limited

NSIC Bhawan, Okhla Industrial Estate,

New Delhi – 110 020

Usage Site: www.nsic.co.in

Compiled By:

Dy. Head of Finance & Accounts

Issued By :

Head of Finance & Accounts

Issue Date : 19.09.2014




Date: 19.09.2014 Page 2 of 124


Declaration

This Financial Services (RMA & Bills Discounting) Manual is the property of National Small Industries Corporation Limited and is issued by Head, of

Finance & Accounts at Head Office and is approved by Director (Finance). No official is authorized to change any part of this manual except Issue

Control Authority after obtaining approval from the Approving Authority for this manual.

This manual is used and applicable for financial assistance to the MSMEs

under Financial Services Scheme (RMA & Bills Discounting) by the NSIC Head Office, Zonal Offices, Branch Offices, NTSCs and other offices of the

Corporation.

All recipients of this manual are hereby informed to submit the controlled

copy of this manual to Head, of Finance & Accounts before leaving this Corporation.




Date: 19.09.2014 Page 3 of 124


Table of Contents

Sr. No.

TITLE NO. OF PAGES

REVISION NO.

QSM CHAPTER

REF.

01 Cover Page 1

02 Declaration 1

03 Table of Contents 1

04 List of Abbreviation used in this manual

1

05 Revision Record Sheet 1

06 Distribution List of Manual 3

07 Procedure for Short Term Financing Schemes

6

08 RMA Scheme-in general 36

09 RMA Scheme-BG/FDR/SDR 5

10 RMA – Agency sale /Bulk

supplies.

13

11 RMA – Lock & Key 5

12 Bill Discounting 9

13 Eligibility Criteria for availing

assistance under NSIC Schemes

1

14 List of Forms 1

15 Forms 40




Date: 19.09.2014 Page 4 of 124


List of Abbreviations

Sr. No. Abbreviations Description

1. NSIC National Small Industries Corporation Limited

2. CMR Corporate Management Representative

3. GM General Manager

4. MSME Micro, Small and Medium Enterprises

5. RMA Raw Material Assistance

6. BD Bill Discounting

7. BG Bank Guarantee

8. MSMED Act. Micro, Small and Medium Enterprises Development Act, 2006.




Date: 19.09.2014 Page 5 of 124


Revision Record Sheet

Sl. Procedure

Reference

Document

Name

Page

Number

Revision

No.

Revision

Date

Revision

Remarks




Date: 19.09.2014 Page 6 of 124


Distribution List of this Manual The following „controlled copies‟ of this manual are distributed to personnel

indicated in the table below. The further transmission of „sub-controlled‟ manuals is done as per the Corporation‟s Data & Document Control

Procedure.

Sl.No. Recipient Station

1. CMD’S Office Head Office, New Delhi

2. Director (Finance) Head Office, New Delhi

3. Director (Planning & Marketing) Head Office, New Delhi

4. Head (Internal Audit) Head Office, New Delhi

5. CVO Head Office, New Delhi

6. Corporate Management Representative Head Office, New Delhi

7. Head (Finance & Accounts) Head Office, New Delhi

8. Head (Business Development) Head Office, New Delhi

9. Company Secretary Head Office, New Delhi

10. Chief Public Information Officer (CPIO) Head Office, New Delhi

11. Head (Law & Recovery) Head Office, New Delhi

12. Head (Works) Head Office, New Delhi

13. Head (GP/TM) Head Office, New Delhi

14. Head (TISDC) Head Office, New Delhi

15. Head – Library Head Office, New Delhi

16. Zonal Head Zonal Office, North-I

17. Branch Head Branch Office, Noida

18. Branch Head Branch Office, Kanpur

19. Branch Head Branch Office, Allahabad

20. Branch Head Branch Office, Dehradun

21. Branch Head Branch Office, Agra

22. Branch Head Branch Office, Meerut

23. Branch Head Branch Office, Sahibabad

24. Branch Head Branch Office, Aligarh

25. Branch Head Branch Office, Greater Noida

26. Branch Head Branch Office, Lucknow

27. Branch Head Branch Office, Varanasi

28. Zonal Head Zonal Office, North-II

29. Branch Head Branch Office, Jaipur

30. Branch Head Branch Office, VKI Jaipur

31. Branch Head Branch Office, Ludhiana

32. Branch Head Branch Office, Chandigarh

33. Branch Head Branch Office, Jalandhar

34. Branch Head Branch Office, Panipat




Date: 19.09.2014 Page 7 of 124


35. Branch Head Branch Office, Bhiwadi

36. Zonal Head Zonal Office, NCR

37. Branch Head Branch Office, Delhi

38. Branch Head Branch Office, Faridabad

39. Branch Head Branch Office, Parliament Street

40. Branch Head Branch Office, Jhandelwalan

41. Branch Head Branch Office, Gurgaon

42. Branch Head Branch Office, Wazirpur

43. Branch Head Branch Office, Bahadurgarh

44. Branch Head Branch Office, Naraina Indl. Area

45. Branch Head Branch Office, Jahangirpuri

46. Zonal Head Zonal Office, South-I

47. Branch Head Branch Office, Chennai

48. Branch Head Branch Office, Ambattur

49. Branch Head Branch Office, Coimbatore

50. Branch Head Branch Office, Madurai

51. Branch Head Branch Office,

Pondicherry

52. Branch Head Branch Office, Guindy

53. Zonal Head Zonal Office, South-II

54. Branch Head Branch Office, Bangalore

55. Branch Head Branch Office, Peenya

56. Branch Head Branch Office, Hyderabad

57. Branch Head Branch Office, Vijaywada

58. Branch Head Branch Office, Hosur

59. Branch Head Branch Office, Cochin

60. Branch Head Branch Office, Belguam

61. Head EMDBP- Hyderabad

62. Zonal Head Zonal Office, East

63. Branch Head Branch Office, Kolkata

64. Branch Head Branch Office, Jamshedpur

65. Branch Head Branch Office, Bhubaneswar

66. Branch Head Branch Office, Rourkela

67. Branch Head Branch Office, Patna

68. Branch Head Branch Office, Durgapur

69. Branch Head Branch Office, Salt Lake, Kolkata

70. Branch Head Branch Office, Ranchi




Date: 19.09.2014 Page 8 of 124


71. Zonal Head Zonal Office, North East

72. Branch Head Branch Office, Guwahati

73. Zonal Head Zonal Office, West

74. Branch Head Branch Office, Mumbai

75. Branch Head Branch Office, Nagpur

76. Branch Head Branch Office, Pune

77. Branch Head Branch Office, Nasik

78. Branch Head Branch Office, Andheri


Aurangabad

80. Branch Head Branch Office, Raipur

81. Zonal Head Zonal Office, Central


Ahmedabad

83. Branch Head Branch Office, Indore

84. Branch Head Branch Office, Bhopal

85. Branch Head Branch Office, Silvasa

NTSCs

86. NTSC Head NTSC, Okhla

87. NTSC Head NTSC, Howrah

88. NTSC Head NTSC, Rajkot

89. NTSC Head NTSC, Hyderabad

90. NTSC Head NTSC, Chennai

91. NTSEC Head NTSEC, Aligarh

92. NTSEC Head NTSEC, Rajpura

DMRBs

93. Branch Head DMRB, Mumbai

94. Branch Head DMRB, Noida

95. Branch Head DMRB, Kolkata

96. Branch Head DMRB, Chennai




Date: 19.09.2014 Page 9 of 124


PROCEDURES 1.0 Purpose:

To establish a proper procedure for ensuring that customer are served properly under the Short Term Financing Schemes (Raw

Material Assistance & Bills Discounting).

2.0 Scope

The scope of this procedure includes the Short Term Financing

Schemes.

3.0 Reference: Quality System Manual, QSM 07 Section 4.0

4.0 Details:

CLAUSE ACTIVITY RESPONSIBILITY REFERENCE

DOCUMENT

4.1 The scheme is propagated to MSMEs

through various campaigns, seminars and advertisements

through media i.e. news papers, electronic media etc. Enquiries

received from entrepreneurs could be by way of personal visit/

letter/telephone.

Dealing

Authority for scheme.

4.2

Obtaining of Application Form/submission of Application by

Entrepreneurs along with necessary documents as prescribed in the

application form.

Dealing Authority for

scheme.

F:FSC:01 F:FSC:04(a)

F:FSC:04(b)

4.3 Entry in the Register containing the party‟s name & address, category to

which they belong etc (in case of

application form obtained from concerned office)

Dealing Authority for

scheme.

Register

4.4 Scrutiny of Application by the

nominated Appraisal Officer as per the standard Checklist within 3

working days from the date of receipt of the proposal.

Designated


Checklist




Date: 19.09.2014 Page 10 of 124


CLAUSE ACTIVITY RESPONSIBILITY REFERENCE DOCUMENT

4.5 Scrutiny of Application by the Head of the Finance at NSIC Office

within 3 working days from the date of receipt of the proposal

from Appraisal Officer.

Designated Authority for

scheme.

Checklist

4.6 Communication to the party listing

out therein the deficiencies as well

as non receipt of the documents both relating to financial as well as

non-financial aspects within 7 working days of having received

the proposal

Designated

Authority for

scheme

Letter to the

Unit

4.7 Call for credit worthiness report

from the Entrepreneur‟s Bank / financial institutions.

Dealing


Letter to the

Banker

4.8 Two reminders to be given to the

party within a gap of fortnight each in the event of non receipt of

documents / clarifications

Nominated

Appraisal Officer

Letter to the

Unit.

4.9 In case of non receipt of the

desired documents / clarifications

during the extended time, final communication to the party

regarding closure of the case

Nominated

Appraisal Officer

Letter to the

Unit

4.10 Inspection of the unit will be

carried out by a team of two officers and one member shall be

from Finance Division.

Nominated

Officers (one from Finance

and one from Executive)

F:FSC:02

4.11 Appraisal Note preparation on

receipt of the complete proposal from the party.

Nominated

Appraisal Officer

F:FSC:03

(RMA) F:FSC:05

(BD)

4.12 Scrutiny of the financial

parameters of the proposal by the head of finance.

Head of Finance F:FSC:03

(RMA) F:FSC:05

(BD)

4.13 Submission of Appraisal Note to NSIC Office Head along with the

comments of Appraisal Officer and Finance Division

Appraisal Officer F:FSC:03 (RMA)

F:FSC:05 (BD)




Date: 19.09.2014 Page 11 of 124



4.14 Calling of State Level Acceptance Committee (SLC) by NSIC Office

Head after ensuring viability of the proposal.

Branch/Centre Head

F:FSC:03 (RMA)

F:FSC:05 (BD)

4.15 Approval of the case, if proposal falls within the delegated powers

Branch/Centre Head

F:FSC:03 (RMA)

F:FSC:05 (BD)

4.16 Conveying the approval of the

proposal to the party along with the terms & conditions including

term of charging the interest on delayed payment, to be complied

with before disbursement

Branch/Centre

Head

Sanction

Letter

4.17 Non-acceptance of proposal, in

case Branch/Centre Head is not

satisfy with the viability of the case

Branch/Centre

Head

F:FSC:03

(RMA)

F:FSC:05 (BD)

4.18 Conveying the decision to the party for rejection of the case,

Branch/Centre Head

Rejection Letter

4.19 Concerned Zonal Head to be

invited to participate in the SLC for consideration and approval of

the case, if the proposal exceeding the delegated power of

Branch/Centre Head

Branch/Centre

Head

F:FSC:03

(RMA) F:FSC:05

(BD)

4.20 Forwarding of the case file

(containing original documents viz., application form, inspection

report, appraisal note) along with

precise and unambiguous recommendations of the SLC to

Appraisal Officer with Development Division at Head Office, proposal

exceeding the delegated powers of Zonal Head.

Branch/Centre

Head

Case File

4.21 The Appraisal Officer in the Development Division appraises

the proposal.

Appraisal Officer, Development

Division (Head Office)

Case File




Date: 19.09.2014 Page 12 of 124



4.22

Finance Division examines the financial related aspects.

Finance Division Case File

4.23 Shortcomings / clarifications, if

any, are conveyed to NSIC Office by way of letter only. However,

original case file will not be parted with.

Appraisal Officer

at Head Office

Case File

4.24 Only after receipt of clarifications

related to viability of the case from the concerned NSIC Office, the

proposal along with the comments and recommendations put up to a

committee consisting of members from Development / Finance

Division.

Appraisal Officer

at Head Office

Case File

4.25 Comprehensive Note to be circulated by Appraisal Officer to

all members of committee containing all relevant data of the

proposal.

Appraisal Officer at Head Office

Case File

4.26 Any additional information required

by the committee to be arranged by the Development Division.

Development

Division

Case File

4.27 In case committee not satisfied

with the viability of the proposal, the observations have to be

recorded accordingly.

Committee at

Head Office.

Case File

4.28 Conveying of non-acceptance of

the proposal to NSIC Office Head

for conveying to the party.

Appraisal Officer Case File

4.29 After ensuring viability of the

proposal, the committee shall give the precise and unambiguous

recommendations and put the proposal for consideration by the

Competent Authority as per delegation of powers.

Committee at

Head Office.

Case File




Date: 19.09.2014 Page 13 of 124



4.30 Conveying the decision to the concerned NSIC Office along with

the terms & conditions to be complied with before the

disbursement including term of charging the interest on delayed

payment (the case file containing original documents will be retained

by Development Division, Head Office / Zonal Office for record and

reference).

Development Division at Head

Office / Zonal Head

Letter

4.31 On receipt of approval from Head Office, Branch/Centre will convey

the decision to the party along with the terms & conditions to be

complied with before the disbursement

Business Development

Division at Branch/Centre

F:FSC:06

4.32 Receipt of Security as decided at the time of sanction and Execution

of Prescribed Documents by / with

the party

Designated Authority

Legal Documenta

tion Manual

& Financial Services

Manual

4.33 Legal vetting of the documents by

the local legal section and removal of deficiencies observed thereof.

Legal Section at

Branch/Centre

Documents

executed

4.34 Entering the Security details in the

Security Register and Make over of all original documents to the

Account for safe custody. Scanned copy of the security documents

and legal documents to be kept.

Designated

Authority

F:FSC:07

4.35 Receipt of processing fee and

forwarding the same to the Accounts Section

Business

Development Division at

Branch/Centre

Note along

with DD / Cheque

4.36 Deposit of processing fee in the Bank account of the Corporation

and preparation of Receipt

Accounts Deptt at Branch/Centre

Bank Receipt

Voucher




Date: 19.09.2014 Page 14 of 124



4.37 Receipt of request of the unit for disbursement along with the

prescribed documents



Disbursement

procedure

4.38 Processing of the request of the unit for disbursement and

obtaining the approval of the Competent Authority


Division & Account Division at BO

Processing Note

4.39 Release of the payment Accounts & Business

Development Division

Forwarding

Letter along with

Cheque / Developme

nt Division

4.40 To ensure timely recovery of the

assistance extended i.e. within

given credit period from the date of assistance

Business

Development

/Recovery Division at Branch/Centre

4.41 Monitoring of the validity of the bank guarantees held as security

and extension of the validity of the bank guarantee



F:FSC:07

4.42 In case of non-receipt of dues

within the prescribed period, the proceeding for invocation of bank

guarantee(s) / fixed deposit receipts will be initiated

Branch/Centre

Head

Invocation

letter to the Bank

4.43 In case of non-recovery of dues left out after invocation of the

Securities, refer the case to

Default Review Committee in the prescribed format after taking

action against the erring officials in accordance with guidelines as

mentioned in this manual.


Division at

Branch/Centre

Recovery Manual




Date: 19.09.2014 Page 15 of 124


NSIC SHORT TERM FINANCING SCHEMES

NSIC Short Term Financing Schemes will comprise of the following:

Raw Material Assistance

Bill Discounting

Each of these schemes are being separately discussed hereunder:-

Raw Material Assistance 1. NAME OF THE SCHEME

The Scheme is called as the „RAW MATERIAL ASSISTANCE SCHEME‟ (RMA).

2. PURPOSE OF THE SCHEME

In order to assist the Micro, Small and Medium Enterprises in procuring

their essential raw material(s), NSIC arranges to provide raw

material as per specific needs and requirement of the unit(s). The facilitation under the scheme is towards:

Procurement of bulk raw materials namely Aluminium, Zinc,

Copper, Iron & Steel etc. which are arranged through NSIC entering into a Memorandum of Understanding with their

manufacturers.

Other Raw Materials wherein NSIC merely makes direct payment to the supplier / manufacturer of the raw material on the specific request of the Micro, Small and Medium Enterprises.

3. TYPES OF ASSISTANCE

The assistance under Raw Material Assistance is being provided in the

following ways:

(I) Raw Material Assistance against security of Bank

Guarantee of approved banks/ Fixed Deposit Receipts of nationalized banks / Security Deposit Receipts of NSIC.




Date: 19.09.2014 Page 16 of 124


(II) Raw Material Assistance Scheme: Agency Sale /bulk supplies including Godown operations and Scheme on arrangement & distribution of Iron and steel for MSMEs.

(a) Against Advance Payment made by the MSMEs.

(b) With financial assistance provided against the security of

Bank Guarantee.

(III) Raw Material Assistance Scheme: Lock & Key Arrangements.

(Presently no assistance is being provided under lock & key

arrangement. Reference in the manual has been made to explain the procedure for disbursements made earlier since in

some accounts outstandings are appearing under this scheme).

4. PROCEDURE FOR SANCTION OF ASSISTANCE

The detailed procedure for sanction of assistance is discussed here

under:

4.1 The proposal for seeking assistance covered under (I), (II) (b) & (III) above will have to be submitted at the NSIC Office(s) in

the prescribed Application form. (Refer F: FSC: 01).

The relevant application form along with prescribed documents, details of securities proposed to be offered by the applicant

unit.

4.2 PRE-SANCTION INSPECTION

Pre-sanction Inspection of the unit will be carried out jointly by

the official of the executive and finance side at the NSIC Office receiving the application. This inspection must be carried out

before the sanction of facility. The factory inspection Report will be prepared and submitted jointly in the prescribed form

(F:FSC:02).

4.3 CREDITWORTHINESS REPORT

To check the financial position and borrowings made by the unit from other sources, Bank‟s Confidential Report should be




Date: 19.09.2014 Page 17 of 124


obtained from the unit‟s banker(s)/financial institution(s). However if the Bank Guarantee proposed as security is being

issued by the bank from whom the unit has availed credit facilities, the obtaining of banker‟s confidential report from said

bank may not be insisted upon. However, the credit worthiness report from the Bank / Financial Institution regarding any

vehicle loan or personal loan, wherein outstanding is 5% of the limit applied or Rs.10 lac whichever is less, shall not be insisted

and in such cases. The latest outstanding of such loan can be confirmed from the statement of accounts / documents issued

by the lender. The comments / remarks w.r.t. such verifications must be reported in the appraisal note.

The proposal will be sanctioned by the Competent

Authority only after being satisfied about the unit’s

credit worthiness, its need for assistance and the securities offered by it.

4.4 EVALUATION OF THE PROPOSAL

On receipt of application duly supported by all prescribed

documents, the case will be processed by preparing an appraisal note (F:FSC:03).

The processing of a proposal would encompass the following:

Preparing of an appraisal note, and

Handling of the proposal through various levels / officers

Each of these two aspects has been explained below:

4.4(A) PREPARING OF APPRAISAL NOTE

As explained above, appraisal format has been prescribed, on which

the detailed appraisal of the unit has to be carried out. The contents of the appraisal form have to be carefully filled as the details

provided therein will have a major bearing on the decision making. The various aspects covered in the appraisal note have been

explained here under which may be remembered while finalizing the appraisal note:-




Date: 19.09.2014 Page 18 of 124


a. Particulars of the Applicant Unit

Full particulars of the applicant firm/unit have to be mentioned against all the columns prescribed in the appraisal

form. Complete address of the unit separately of its offices and factory with telephone number should be given. While writing the number and date of MSME Registration, it should

be indicated whether the registration is provisional or final. If

the unit is located in a backward / Hilly area, the category of

backward area has to be mentioned.

If there are any other Associates/ Sister Concerns of the applicant unit, the particulars of such concerns have also to

be mentioned. Ascertaining of inter-unit transactions (if any) between all associate units and the Net Worth of the

group/promoters is also required. If any other company holds majority stack i.e. 50% or more in the equity of applicant

unit, it should be thoroughly examined in order to ascertain whether the applicant unit fulfils the norms prescribed for MSMEs.

b. Particulars of Promoters

Under this heading, complete details about the promoters

with their qualification and past experience should be given. Whether the promoter‟s past experience is relevant and

adequate for successful implementation of the Project and its smooth running has to be indicated.

If the promoters do not possess adequate experience in the

line of proposed activity, the alternative arrangements proposed to be made for operating the proposed project have

to be examined. Net worth / means have to be worked out by

subtracting each promoter‟s liabilities from his gross tangible immovable and movable assets.

Copies of promoter‟s income tax and wealth tax returns field

for the last financial year should also be obtained so as to verify their income and means.




Date: 19.09.2014 Page 19 of 124


c. Project / Line of Activity

Under this heading, the nature of activity and the products to be manufactured have to be mentioned.

d. Conduct of Account with other Financial Institutions

and Banks

In case of existing units, the experience of its dealings with other Financial Institutions and Banks must be ascertained so

as to see whether any defaults have been committed in meeting the commitment of other Financial

Institutions/Banks. The details of loans availed from other Financial Institutions and credit limits from Banks with their

nature & amount should be indicated under this heading. If

the applicant unit has not availed any credit limit or loan from Bank/Financial Institutions, it is possible that its other

Associates / Sister concerns might have availed the same from other Bank‟s/ Financial Institutions. Their dealings

should also be got examined and the experience and conduct of their account should be reported in the appraisal note.

e. Comments on the Financial Data provided by the

Applicant Unit.

In case of existing unit financial data of previous year, current year and for next year should be examined.

Net Sales should be given net of excise duty. To arrive at the net profit before interest and tax, the interest on Term

Loans/Hire Purchase / Leasing only should be added back to

the pre tax profit. However, the interest on working capital is not to be added back in the above amount. Tangible Net

Worth is to be worked out by subtracting all intangible assets like goodwill, preliminary and pre-operative expenses,

accumulated losses etc. from the amount of paid up capital and free reserves. Capital employed by the unit is also to be

indicated and it is to be worked out by adding net working capital to the fixed assets or alternatively by adding term

liabilities in the amount of Net worth. In addition to this, Current ratio has to be worked out in order to ascertain the

unit‟s contribution to the project cost and liquidity position of the enterprise.




Date: 19.09.2014 Page 20 of 124


f. Nature and Amount of assistance sought

Under this heading, the requirement of applicant‟s unit for assistance from NSIC with the kind of facility and amount is to

be reported.

g. Securities Proposed:

The nature and amount of securities proposed to be provided against the assistance sought from NSIC should be clearly

mentioned.

h. Recommendations:

Under this heading, the recommendations made by the recommending officers and sanction by the competent

authority have to be recorded viz. Nature of facility, amount

recommended, terms & conditions should be clearly mentioned under this heading.

4.4(B) METHODOLOGY FOR HANDLING THE CREDIT PROPOSALS

The following methodology has to be adopted for handling of

proposals received at the various offices of the Corporation:

a. An Appraisal Officer should be nominated in the Business Development Division of each of the NSIC Offices by the

Office Heads and at Head Office by the Director (Plg. & Mkg.). Such Appraisal Officer shall be responsible for the

handling and appraisal of the proposals received.

b. In case of proposal(s) received at NSIC offices which

are within the delegation of powers of Head of NSIC office:-

b.1 The Appraisal Officer in the Business Development Division

of NSIC Office shall receive the proposal(s) and shall carry

out the scrutiny of the proposal papers within three working days of having received the proposal. Any deficiencies in

the documents received as well as non-receipt of any documents relating to the non-financial aspects in the

appraisal of the proposal shall be recorded.




Date: 19.09.2014 Page 21 of 124


b.2 Thereafter the file containing the proposal shall be sent to the head of finance at the NSIC Office who shall scrutinize

the financial parameters of the proposal. Any deficiencies in the documents received as well as non-receipt of any

documents relating to the financial aspects in the appraisal of the proposal shall be recorded. This exercise must be

carried out within the next three days.

b.3 The NSIC Office having received the proposal shall send only

one communication to the party listing out therein the deficiencies in the documents as well as non-receipt of

documents if any relating to both the financial as well as non-financial aspects of the proposal. This communication

must be sent by the Appraisal Officer within seven working days of having received the proposal. Piecemeal

communication of deficiencies to the party must be avoided.

The party must also be advised to submit the required

documents / remove the deficiencies as conveyed in the communication, within a reasonable and specified time

frame failing which the proposal would not be considered.

The communication to the party must contain the last date by which the required documents/clarifications must be

received.

In the event of non-receipt of documents / clarification, the

party shall be given two reminders within a gap of fortnight each. If even after the lapse of extended time given, the

party does not respond, a final communication shall be sent by the Appraisal Officer to the party that due to non-

submission of the documents by it, the case has been closed.

b.4 After all documents have been received, the officers nominated separately for this purpose by the NSIC office

Head shall conduct the inspection of the unit. The inspection report, complete in all respects and containing the findings /

recommendations of the inspecting team should be placed in

the file.

b.5 The Appraisal Officer shall prepare the appraisal note; fill in

all the contents of the proposal. Thereafter, the Finance Division shall cross check the financial aspects of the




Date: 19.09.2014 Page 22 of 124


proposal and give their comments if any on the deficiencies/viability of the proposal. The appraisal note

containing the comments of the Appraisal Officer as well as the Officer from the Finance Division shall be submitted to

the NSIC Office Head.

b.6 The NSIC Office Head only after ensuring the viability of the

proposal shall call a meeting of State level acceptance committee (SLC) and accord approval, in case the proposal

falls within his delegation of powers.

b.7 In case the NSIC Office Head is not satisfied with the viability

of the proposal, the Appraisal Officer must without further delay will send a communication to the party that due to

non-acceptance of the proposal the case has been closed.

c. In case of proposal(s) received at NSIC offices which

are within the delegation of powers of Zonal Head

c.1 In respect of proposal(s) examined and found viable by the NSIC office which are not within the powers of NSIC Office

Head, the Zonal Head shall also be invited to participate in the state level acceptance committee (SLC) referred in the

para b.6 above so that the proposal is considered and approval accorded in case the proposal falls within the

delegation of powers of the Zonal Head.

However, in order to expedite the sanction of the proposal and disbursement there against, which is fully secured

against the Bank Guarantee, in such situations where the physical presence of the Zonal Head at the particular branch

can not be made, the approval of the Zonal Head should be obtained by fax and/or on file by sending the proposal to the

Zonal Head.

c.2 For proposal(s) not covered within the delegation of power of the Zonal Head, the same after giving precise and

unambiguous recommendations of the SLC shall be forwarded to the Appraisal Officer in the Development

Division at Head Office.




Date: 19.09.2014 Page 23 of 124


d. In case of proposal(s) received at NSIC offices which are within the delegation of powers of Head Office:-

d.1 On receipt of the proposal(s) at Head Office, the proposals will be appraised by the Appraisal Officer in the

Development Division. Thereafter with the comments of Appraisal Officer, the Finance Division shall examine the

financial aspects of the proposal. In case any further clarifications are required w.r.t. the observations made by

the Appraisal Officer or from the Finance Division, the Appraisal Officer shall seek the details / clarifications from

the NSIC office(s).

d.2 After ensuring that all clarifications related to the viability of

the case have been obtained, the Appraisal Officer shall put up the case to a committee consisting of members from the

Development / Finance Divisions.

The Appraisal Officer shall circulate to the members a comprehensive note containing all relevant data relating to

the proposal. Such data must inter alia include information relating to the promoters of the unit, the nature of

assistance sought, details of raw material required under assistance, marketing aspects of the case, securities offered

by the unit along with their estimated value, recommendations of the SLC, issues raised on receipt of the

proposal at Head Office and the replies thereto from the NSIC office. A copy of the Appraisal Note prepared by the

NSIC office must also be enclosed with the above-referred note prepared by the Appraisal Officer.

d.3 Any additional information sought by the committee referred in d.2 above, will be arranged by the Development Division.

d.4 After ensuring the viability of the proposal, the committee as

referred in d.2 above, shall give precise and unambiguous recommendations on the proposal and put up the same for

approval by the Competent Authority as per delegation of powers.

d.5 In case the committee referred at d.2 above, is not satisfied with the viability of the proposal and has recorded its

observations accordingly, the Development Division must convey the non-acceptance of the proposal to the NSIC




Date: 19.09.2014 Page 24 of 124


Office Head who shall further communicate the non-acceptance of the proposal to the party and the case may be

closed.

d.6 The recommendations of the committee referred at d.2

above and also of the Competent Authority (as per delegation of powers) either for acceptance or rejection of

the proposals have to be annexed to the appraisal note received from the NSIC office and forwarded by the Zonal

Head.

d.7 On approval of the proposal by the Competent Authority, the

Development Division shall convey the terms of sanction to the NSIC office.

e. Number of copies of the proposal

e.1 In case of proposal(s), which are within the delegation of

power of NSIC Office Head and the Zonal Head, only one

copy of the application shall be processed.

e.2 In case of proposal(s) requiring approval of Head Office as

per delegation of powers, NSIC office should prepare two sets of the required documents. Out of these two sets, the

original set of the proposal i.e. the application form and documents as prescribed under the scheme along with the

original appraisal note, inspection report and the recommendations of the SLC held at NSIC Office shall be

forwarded to the Appraisal Officer in the Development Division, Head Office.

e.3 In case the proposal(s) sent to Head Office is found incomplete or the Head Office desires to have some

additional information, it shall seek such information / clarification by way of a letter. Under no circumstances, the

proposal file will be returned.

e.4 On ultimate decision of the proposal i.e. the acceptance or the rejection, the proposal file will be retained at Head Office

along with the copy of the sanction letter for post sanction monitoring.




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f. Time frame for decision on the proposal

f.1 The preliminary evaluation of the proposal has to be carried

out within the time frame as explained in para b.1 to b.3 above.

f.2 In case of incomplete applications, a time frame has been specified at para b.3 above whereby the unit shall be

allowed a specified time to submit all documents, failing which the proposal shall be treated to be closed.

f.3 On receipt of the complete information and in case of proposal being within the powers of NSIC Office Head and

/or the Zonal Head, the evaluation and a decision on the proposal (acceptance or rejection) has to be

completed/taken within six weeks from the date of receipt of complete details/information. However, in case of

proposals, which are within the delegation of powers of the

competent authority at Head Office, the proposal from the NSIC Office along with the recommendations of SLC shall be

forwarded to the Head Office within six weeks from the date of receipt of complete details / information.

f.4 At Head Office, the Development Division shall ensure that a decision on such proposals is taken within the period of four

weeks from the receipt of such proposals.




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5. DOCUMENTATION FOR RAW MATERIAL ASSISTANCE

5.1 Before disbursement of assistance under Raw Material Assistance

Scheme the following documents will be obtained by the designated officers in the Business Development Division, from

persons authorized by the unit.

i. Agreement for Raw Material Assistance Scheme ii. Material Receipt Note

iii. Demand Promissory Note iv. Letter Of Continuity

v. Bank Guarantee from Approved Bank / SDR / FDR vi. Personal Guarantee of The Directors / Partners /

Proprietor.

5.2 The formats of the above documents have been prescribed in the

Legal Documentation Manual. (MNL.LDOC.01). For all cases even though within the power of Zonal head but where any document

to be executed requires any amendment from the format prescribed as per the Legal Documentation Manual, prior approval

from head of law division at head office must be obtained regardless the value of assistance / limit to be sanctioned in any

case.

5.3 It is to be ensured that proper documentation is being done before the Corporation invests its funds for assistance to MSMEs.

5.4 In cases where the documents to be executed with the party availing assistance are exactly in conformity with the documents

as prescribed in the Legal Documentation Manual, the same must be vetted by the local Law Officer before disbursement is made.

However, where there is any deviation / modification /

amendment in any of the term(s) and condition(s) of the documents as prescribed in the Legal Documentation Manual

(irrespective of the value), the concerned Branch/Centre shall forward such documents to Law Division at Head Office for vetting

of the same after the recommendations of local law officer.

Disbursement to the party shall be made only after execution of the documents as approved by Law Division, Head Office.




Date: 19.09.2014 Page 27 of 124


5.5 The documents collected from the borrowing units should be deposited with the designated officers of every NSIC Office, who

shall keep these documents and maintain a register for their receipt and release. These documents shall be kept in custody

preferably in a fire proof cabinet.

5.6 All offices should have a „fire proof / fire resistance safe‟ to keep important documents (like original bank guarantees, their

extensions agreements etc.). For the purpose of day to day reference, photocopies of such documents should be kept in the

relevant file. In addition, it must also be ensured by all offices to scan all important documents (like BGs etc.) and keep soft copy

thereof on the intranet and in the locker of bank.




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6. DELEGATION OF SANCTIONING POWER:-

Sanction of Proposals received under Raw Material Assistance

Scheme can be done as per sub delegation of powers conveyed in the „Manual on Sub Delegation of Powers‟ issued by the Company

Secretary and changes made therein from time to time.

Detailed guidelines contained in the manual of sub delegation of powers have to be complied with while exercising the powers sub-

delegated. However, the following deserve a special mention:-

6.1 Maximum exposure to a single unit under Raw Material Assistance and / or Bill Discounting against the security of BG

6.1.1 Maximum exposure to a single unit under these schemes is Rs. 500 Lac. (This limit is effective from

01.07.2011)

6.1.2 While processing the proposal of any unit to enhance its limit beyond Rs. 300 lacs it must be ensured by the

Branch/Centre that the following are complied with:

a) All outstanding dues (inclusive of all charges up to that date) against the limit already sanctioned must be

within 180 days.

b) The unit shall furnish the Bank Guarantee from any of the approved bank(s), also complying with the

guidelines w.r.t. the exposure permitted there against.

For further clarifications w.r.t. above, unit will be

allowed to mobilize and submit to NSIC the bank guarantee from one or more bank(s) as appearing in

the list of approved bank(s) under the scheme.

c) The raw material has to be procured only from any of its manufacturer or through its authorized registered

dealer who has registered itself with the statutory authorities.




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6.1.3 The ceiling for maximum exposure to all associate /

sister concerns or connected accounts belonging to a

„GROUP‟ is fixed at Rs. 1500 lacs.

For the purpose of determining the ceiling of Rs. 1500 lacs of a „GROUP‟, all the associate/sister

concerns or connected accounts belonging to a „GROUP‟ shall be treated as one account. In other words,

assistance to associate/sister concerns of a „GROUP‟

shall be clubbed together and the total assistance shall be restricted to Rs. 1500 lacs only.

Two or more units shall be treated as one account of a

„GROUP‟, for the purpose of exercising sub-delegation of power.

6.1.4 Definition of „GROUP‟

The term „GROUP‟ for the purpose of deciding the ceiling

of Rs. 1500 lacs shall encompass the following:

two or more units set up by the same person as a proprietor, or

two or more units set up as partnership firms having one or more partners as common

partner or partners in such firms, or

holding company along with its subsidiary company(s), or

two or more subsidiaries of the same holding

company (As per section 2(47) of the Companies Act‟ 1956, „Subsidiary Company‟ or

„Subsidiary‟ means a subsidiary company within the meaning of section 4 of the Companies Act,

1956), (or amended from time to time), or

two or more units wherein a person and / or his

relative is a proprietor / partner / director of other unit.




Date: 19.09.2014 Page 30 of 124


It is, further, clarified that a person shall be deemed to be a ‘relative’ of another if, and only if:

they are members of a HUF; or

they are husband and wife ; or Father, mother, son and son‟s wife, daughter and

daughter‟s husband, brother and brother‟s wife, sister and sister‟s husband.

6.1.5 Proposals beyond the Powers of Zonal Head / Head of

NTSC

Before recommending any proposal to Head Office which is beyond the powers of Zonal Head / Head of NTSC, it

should be ensured that the unit has already been

sanctioned and has availed the maximum assistance as permissible within the sub delegated powers of Zonal

Head / Head of NTSC.

While recommending such proposals to Head Office, the conduct of the account of the unit should be monitored

w.r.t. timely re-payment of dues. Any outstanding beyond 180 days in the account of the unit being

considered for enhancement should be recovered before recommending such proposal.

6.2 Competent Authority for sanction of cases:

Para no.6.1.1

& 6.1.3

Corporate Acceptance Committee

(CAC) comprising of Director (P&M), CGM/GM(BD) & G.M. (Fin.)/DGM(Fin.)

and Director (Finance) as head




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7. DISBURSEMENT :-

The following disbursement procedure is to be adopted while extending the assistance to the unit:

7.1 After sanction of the proposal the disbursement will be made on completion of documentation and all other requirements as

stipulated in the sanction letter.

7.2 The unit while requesting for disbursement against the limit

sanctioned should furnish the following documents:

i) Proforma Invoice/ Invoice.

ii) Materials Receipt Note iii) Unit‟s Request

7.3 In case of first assistance, after sanction of the limit, the invoices

/ material receipt note should not pertain to the period before the date of sanction of limit. In case of subsequent assistance,

wherein there is huge time gap between the date of invoice & the date of approaching NSIC for assistance, a confirmation has to be

obtained from the supplier unit(s) that the bills for which assistance is being sought have not already been paid to the

supplier. Only after obtaining confirmation from the supplier unit, should NSIC process such requests. In any case invoices should

not be more than 90 days old.

7.4 In case the assistance has been extended against proforma invoice, the unit must provide copy of the original invoice

immediately after receipt of the material. NSIC Office must ensure to receive the copy of the original invoice before extending further

assistance to the unit.

7.5 NSIC Office should extend assistance maximum to 95% of the Bank Guarantee / FDR /SDR Value or 94% of the Bank Guarantee

value (in case unit‟s account is debited with the processing fee), as it would ensure the coverage of the interest & processing fees.

However in no case, the outstanding amount (comprising of principal, interest, processing fees & penal interest)

should be allowed to exceed the value of Bank Guarantees / FDRs / SDRs taken as Security.




Date: 19.09.2014 Page 32 of 124


7.6 The payment should be released only in favour of supplier(s) of raw material and under no circumstances should be given to the

applicant unit.

7.7 In case of import of raw material when the letter of credit is opened by the party in favour of foreign supplier as beneficiary

and the unit approaches branch/centre to facilitate procurement of imported raw material, in such case the payment is released in

favour of bank of the borrowing unit a/c name of the unit for the purpose of retiring import documents facilitating bank of

borrowing unit to remit payment to foreign supplier of the raw material.

In such cases, it is the responsibility of branch / centre to ensure

and obtain sufficient evidence proving the actual delivery of

imported raw material for which assistance has been sought. Branches/Centres must obtain one copy of full set of negotiable

documents evidencing the import of raw material and delivery of the same to the borrowing unit. The Material Receipt Note (MRN)

should also be obtained from the unit mentioning therein the exact description and quantity of the imported raw material

received by it in good condition.




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8. RATE OF INTEREST

8.1 The rates of interest (%) applicable on all the proposals sanctioned and / or disbursed on or after 07.5.2011 are as under:-

Security

From

7.05.2011 to

10.7.2011

From 11.07.2011

To 1.08.2011

From 2.08.2011

To 19.09.2011

From 20.09.2011

To 31.01.2013

From 01.02.2013

Against Bank

Guarantee

12.50 12.75 13.15 13.40 12.95

The revised rate of interest as mentioned above shall be applicable

on the all proposals sanctioned and disbursed on or after the date of its applicability from time to time. The principal amount outstanding

as on the date of applicability of revised rate of interest but

pertaining to the assistance already granted and disbursed, shall also attract revised rate of interest. The revision in the rate of

interest should also be intimated to the units availing assistance from NSIC.

8.2 Delayed Payment Interest

In case payment is not received within the credit period allowed,

higher rate of interest will be charged (over and above the normal rate of interest) towards delayed payment interest on the

outstanding principal amount as mentioned below:

w.e.f. 01.02.2013

Period Rate of Additional Interest on the delayed payment

91-270 days 0.75% for the cycle of 90 days

271 & above 1.00% for every cycle of 90 days

w.e.f. 16.08.2014

Period Rate of Additional Interest on the delayed payment

91 & above 1.00% for every cycle of 90 days




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8.3 For units rated under Performance & Credit Rating Scheme

The units (only Micro or Small enterprises) rated under

Performance & Credit Rating Scheme shall be given incentive by way of special rate of interest. The following reduction in the rate

of interest shall be linked to the rating assigned to the units under the Performance & Credit Rating Scheme:

Rating Scale on Performance and Credit

Parameters

Reduction in

rate of

interest w.e.f.

01.4.2011

SE 1A Highest Performance capability;

High Financial Strength

1.00%

SE 1B Highest Performance capability;

Moderate Financial Strength

0.50%

SE 2A High Performance capability;

High Financial Strength

0.50%

The above reduction in the rate of interest shall be applicable in

respect of limits sanctioned / assistance granted under various schemes of the Corporation provided the assigned rating is valid on

the date of sanction / assistance given. The concession will continue till the validity of the rating awarded by the rating agencies and

shall cease on expiry of the rating, unless the rating is renewed.

Further, the above concession in the rate of interest shall be

applicable only to those cases, where the units make timely repayment of the Corporation‟s dues. The units, which have

defaulted or defaults in repayment of dues within the stipulated

period of 90 days, shall not be eligible for aforesaid concessions.




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9. PROCESSING FEE

i) Processing Fee shall be charged @ 1% p.a.

ii) At the time of processing of application for enhancement of limit, the processing fee shall be the same as at @ 1% p.a.

iii) At the time of processing of application for renewal of limit, the

processing fee shall be the same as at @ 1% p.a.

iv) Processing fee must be collected upfront, after the sanction of credit limit but before release of assistance.

v) In case unit requests, processing fee can be accepted by debiting to

the unit‟s account. Such amount debited to the party‟s account shall

attract interest thereon at the prevailing rates and will be counted while determining the maximum permissible ceiling of amount to be

released.

vi) The processing fee shall be charged to the extent of the Bank Guarantee(s) submitted by the unit against the limit sanctioned e.g.

if a unit is sanctioned a limit of Rs.1 crore and against this it brings a Bank Guarantee of Rs.25 lac, processing fee shall be charged on

Rs.25 lac. Thereafter during the validity of sanctioned limit (i.e. one year) as and when the unit brings in the Bank Guarantee to avail

the limit, processing fee shall be charged there against accordingly.

vii) As the sanctioned limit has a validity of one year and thereafter needs to be renewed, a unit shall have the flexibility to avail the

sanctioned limit within the entire period of one year instead of

restricting it to the value of Bank Guarantee submitted at the end of three months or revoking it in case no Bank Guarantees have been

submitted. This shall be linked to the proposal at (vi) above.

viii)The Bank Guarantee, in normal course, should be of one year period. However, in exceptional cases the Bank Guarantee of

shorter duration can be accepted with the approval of Zonal Head/ Centre In-charge.

Processing fee, once received / realized, is non-

refundable. Even in case of withdrawal of the Bank Guarantee by the unit, the processing fee is not

refundable.




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9.1 Concessional processing fees for timely payment of dues.

For roping in the clientele under Raw Material Assistance Scheme

and with a focus on rewarding the „loyalty factor‟ in respect of the units availing limits of Rs. One Crore & above and making timely

payment of dues as well as continuing to avail the facilities under Raw Material Assistance Scheme of NSIC beyond one year, a

concession of 0.25% in processing fees shall be extended to:

(a) The units with limits of Rs. One Crore and above, and

(b) Units at (a) making timely payment of all their dues (without

any default), and (c) At the time of renewal of limits, after the unit has availed the

limits for at least one year.




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10. MONITORING

After sanction of the proposal, the disbursement will be made on

completion of the documentation and other formalities stipulated in the sanction letter. It is essential that under post-sanction and

post-disbursement, every case is closely monitored. Timely collection of payments of principal as well as the interest accrued

thereon is essential. In the event of any default, prompt action has to be initiated by invoking the securities available. Invocation of the

securities has been separately explained below:

10.1 INVOCATION OF BANK GUARANTEE

10.1.1 As per the Raw Material Assistance Scheme, finance can be

provided for a normal period not exceeding 90 days. In the event of default, the security available by way of Bank Guarantee has

to be invoked. Decision to invoke a Bank Guarantee has to be taken by a Branch/Centre Head along with the respective Zonal

Head.

There may be cases where the unit is not a willful defaulter and has genuine reasons for default. The Zonal Heads based on the

facts of each case would decide whether or not a unit is a willful defaulter. Wherever it is found that the unit is not a willful

defaulter the withholding of the invocation of Bank Guarantee can be considered. However, such withholding of invocation can

be allowed only for a maximum period of three additional cycles of permitted credit period ( not exceeding 270 days for three

cycles) after completion of first cycle of the permitted credit

period.

In case the unit is found to be a willful defaulter, the Bank Guarantee has to be invoked and the interest for delayed period

must also be recovered.

10.1.2 Cases where the unit(s) not able to repay assistance

within 90 days – Authority to decide on allowing further extension of credit facility and conditions thereof.

In case any unit does not re-pay the assistance on the expiry of

normal credit period of 90 days, the competent authority to




Date: 19.09.2014 Page 38 of 124


decide whether or not such unit is to be allowed further extension for availment of credit facility shall be as mentioned in

the table below:

Period Authority

Assistance up to 90 days plus two additional cycles of 90 days each.

Branch/Centre Head

Beyond 270 days Zonal Head

The competent authority while considering allowing the credit

beyond 90 days in the above cases must ensure that the following conditions are met:

a) The unit makes the payment of interest and processing fee

(at the prevailing rate) already fallen due, and

b) After payment of interest and processing fee mentioned in a) above, the outstanding towards principal amount of

assistance is not more than 95% of the Bank Guarantee value, and

c) The Bank Guarantee shall be valid at least for the further period of extension to be allowed.

d) In case any unit does not repay the outstanding amount

within the extended period of 270 days, the Zonal Head is the

authority to allow further extension of 90 days for availment of credit facility subject to the condition that inspection of the

unit has been carried by the concerned Branch/Centre officials confirming that the unit is in running condition.

The Total Outstanding under No Circumstances be

Allowed to go Beyond 360 days.

Even if the unit complies with the conditions as mentioned at a) and b) of above para and subject to the condition that the Bank

Guarantee is valid, a notice in writing should be given to the unit on 330th day to repay the total dues positively by 350th day

failing which the Bank Guarantee should be invoked immediately so as to ensure the realization of the payment by the bank on or

before 360th day. The 330th day, 350th day and 360th day shall

be from the date of credit provided to the unit.




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10.2 ENCASHMENT OF FDR / SDR

The procedure explained in 10.1 above, for allowing extension in cases of default or invocation of Bank Guarantee may also

be followed for encashment of FDR / SDR, wherever taken as security.

10.3 VITAL ASPECTS OF MONITORING MECHANISM

The Head of the Branch / Technical Centres as well as Finance Head posted therein are responsible for monitoring of the

following aspects while Zonal Head should also oversee the adequate efforts put in by Branch/Centre for post-sanction

and post- disbursement monitoring so as to avoid eventuality

of loss occurring due to any reason inter-alia including the validity of bank guarantee expiring, delayed invocation of

bank guarantee, outstanding exceeding the BG value etc. Beside this the Zonal Head is also expected to monitor the

statements including the details reported therein and take prompt and prior action wherever required to prevent the

occurrence of any unwarranted loss. These lapses are briefly explained hereunder:

i. The bank guarantees are kept in safe custody (not to

left in any officer‟s drawer), with the custodian thereof clearly defined,

ii. The validity of bank guarantees received from the parties to be monitored and timely action to be taken

for renewal / invocation thereof,

iii. The assistance granted against the limits sanctioned and the BGs submitted by the party(s), ensuring that

the overall assistance remains within the limits, iv. The overall outstanding (amount of assistance plus

interest, processing fees and interest on delayed payment etc.) at any point of time against any party

remains within the BG value, v. The interest and processing fees are being debited

timely and as per the rates prescribed – keeping in view the effective dates in case of any change therein. In

this regard, the accounts head must ensure that vouchers are made and accounted for without any delay

therein.




Date: 19.09.2014 Page 40 of 124


Branch/Centre / Zonal head where cases of expiry of bank

guarantee and even delayed invocation of bank guarantee (which also caused the outstanding to exceed the value of

bank guarantee) as and when occur, shall be held personally responsible for losses if any occurring due to such lapses.

10.4 Four Tier Monitoring System

It must be ensured that the monitoring of the Bank Guarantee

portfolio together with the investments made there against is meticulously done in accordance with the guidelines

mentioned hereunder:

Tier Functionary Action to be taken

1st Tier

Custodian of BG portfolio

To ensure the validity of Bank Guarantee every day without fail and take action

w.r.t. Bank Guarantees which have to be renewed/invoked.

2nd

Tier

Branch/Centre Head

(Where Branch /Centre Head is also

the Custodian, action at Tier 1 above also

must be taken.)

(a) To monitor the outstanding every

day and ensure that the dues are in accordance with the prescribed

guidelines. (b) To physically verify the Bank

Guarantees on the last working day of the week.

3rd

Tier

- Zonal Heads for all

branches under their Zones.

- GM (Law &

Recovery) for DMRBs

- Head of Tech. Division at HO for

NTSCs.

a. To monitor the outstanding on the

basis of monthly report submitted by Branch Head / Head of NTSC /

DMRB. b. To ensure that the dues are in

accordance with the prescribed guidelines.

c. Physical verification of Bank Guarantees by visiting the concerned

Office at least once in a quarter. In case of DMRBs and NTSCs, the

controlling officer at corporate level may depute his sub-ordinate for

physical verification of BGs and

submit the report based on which action must be taken by him.




Date: 19.09.2014 Page 41 of 124


4th Tier

CGM (IA) at Head Office

(a) To monitor the consolidated BG Portfolio of all the NSIC Offices

including Branch Offices/ DMRBs / NTSCs,

(b) To lay special focus on validity of Bank Guarantees held as securities,

and (c) To make correspondence for ensuring

timely action by NSIC offices for renewal / invocation of Bank

Guarantees as per the prescribed

guidelines.

Further, it must be ensured by all offices that in no case the outstanding towards assistance extended (i.e. Principal

amount, interest, additional interest on delayed payment, processing fee etc) exceeds the value of the Bank Guarantee

received from the units and the validity of the BG expires.

10.5 Action to be taken on non-compliance of guidelines

under Raw Material Assistance Scheme against Bank Guarantee(s).

In order to safeguard the investment of the Corporation, the

Bank Guarantee portfolio needs to be strictly monitored so as to ensure that:

(a) The outstanding towards assistance extended never exceeds the value of BG received from the units, and

(b) All the BGs remain valid at all times.

In case of non-compliance of Head Office guidelines on handling the BG portfolio, the disciplinary action has to be

taken against such erring officials. The guidelines with respect to initiating ‘disciplinary action’ against the erring

officials responsible for committing (a) procedural lapses, and

(b) irregularities causing financial loss to the Corporation, are tabulated below:-




Date: 19.09.2014 Page 42 of 124


1. Action to be taken on non-compliance of guidelines under Raw Material Assistance Scheme against Bank

Guarantees

Nature of Irregularity Action to be taken Officer(s) responsible to take action 1.1.

1.1.1

1.1.2

1.1.3

1.1.4

Deficiencies in documentation Non conducting of inpection, appraisal note, non obtaining of prescribed documents, deficient documents obtained from the units etc. Unit‟s Account not updated (not charging service charges, interest, penal interest on regular basis). Not maintaining Security Register.

Allowing outstanding to go beyond 360 days.

(a) Explanation is to be called for on

noticing the irregularities to concerned officer and/or Branch Head/Head of NTSC/DMRB for rectification of discrepancies within 10 working days and advising them to ensure non- occurrence of such irregularity in future, with a copy to Zonal Head/GM (Law & Rec)/ Head of Tech Division at HO.

(b) In case of non- rectification of

discrepancies within the prescribed time frame appropriate action (like issue of Show Cause Notice , with a copy to personal file) to be taken by the Zonal Head/NTSC Head/GM (Law & Recovery) considering the gravity and seriousness of the deficiency.

(i) In case of officers below Branch / Centre

Head - Head of Branch/NTSC/ DMRB (ii) In case of Branch / NTSC / DMRB Head-

Zonal Head / GM( Law & Recovery)/ Head of the Technology Division/ Functional Director*

*Note: In case, the Branch Head/NTSC Head/ DMRB Head along-with other officials are responsible for irregularities/ discrepancies, the action is to be taken by the Zonal Head/ GM(Law & Recovery) /Head of the Technology Division at Head office.

However, in case the Technology Div. at Head Office is headed by any officer of below CGM level, the action would be taken by the functional Director based on the recommendation of the committee consisting of GM (BD), DGM (BD/Exhb) and DGM (Tech).




Date: 19.09.2014 Page 43 of 124


Nature of Irregularity Action to be taken Officer(s) responsible to take action

1.2. 1.2.1 1.2.2 1.2.3 1.2.4 1.2.5

Lapses in implementation Exceeding Delegation of Powers. Changing the prescribed format of documents like Agreement, Bank Guarantee etc. without prior approval of Head Office. Disbursement of assistance without obtaining written confirmation from the bank as prescribed in the F.S. Manual. Non obtaining of legal vetting of documents to be executed with the unit. Wrong reporting / hiding of facts.

a) Explanation is to be called on noticing the lapses to the concerned officer and/or Branch Head/Head of NTSC/DMRB by the designated authority with the instructions to rectify the lapses / irregularities within 10 working days.

b) In case of failure to rectify the lapses/

irregularities within the prescribed time period, „Show Cause Notice‟ will be served on the concerned erring officer(s).

(i) In case of officers below Branch /

Centre Head-. Head of Branch/ NTSC/ DMRB:

(ii) In case of Branch / NTSC / DMRB

Head- Zonal Head / GM( Law & Recovery)/ Head of the Technology Division/ Functional Director*:

*Note: In case, the Branch Head/NTSC Head/ DMRB Head along-with other officials are responsible for irregularities / discrepancies, the action is to be taken by the Zonal Head/ GM (Law & Recovery)/ Head of the Technology Division at Head office.

However, in case the Technology Div. at Head Office is headed by any officer of below CGM level, the action would be taken by the functional Director based on the recommendation of the committee consisting of GM (BD), DGM (BD/Exhb) and DGM (Tech).




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2. Penal provisions for committing irregularities under Raw Material Assistance Scheme against Bank Guarantees

Sl. No.

Nature of irregularity Disciplinary Action to be taken Officer(s) responsible to take action

2.1.

2.1.1

FINANCIAL LOSS

Non charging / short charging of:

(a) processing fee,

(b) service charges,

(c) interest & penal interest etc.(not in consonance with the Head Office guidelines)

(a) In cases, where irregularities are committed in a few cases due to clerical/oversight errors, „Advisory Memo’ to be issued with an advice to rectify & regularize the account and recover the interest /service charges/ delayed payment interest within 15 days. In case of non-compliance, show cause to be issued with instruction to recover the dues within 15 days.

(b) In case such irregularities are noticed in several

cases, „Show Cause Notice‟ to be served to the erring officers, with the instructions to rectify & regularize the account and recover the interest /service charges/ delayed payment interest within 15 days.

(c) In case of non compliance of the above, „Charge

Sheet‟ will be served to the erring officer(s).

(i) In case of officers to the level of DO and equivalent - Head of Branch/ NTSC/ DMRB

. (ii) In case of officers to the level of

Chief Manager- Zonal Head / GM( Law & Recovery)/ Head of the Technology Division at Ho

(iii) In case of officers of DGM

level.- Functional Director (Refer Office Circular No. SIC/Pers.I/10(10)/08 dated 03.10.2008 and the amendments issued from time to time).




Date: 19.09.2014 Page 45 of 124


Sl. No.

Nature of irregularity Disciplinary Action to be taken Officer(s) responsible to take action

2.1.2

Any financial loss caused to NSIC on account of non recovery of outstanding dues granted in excess of BG value (including interest and service charges) or interest / any other charges unrecovered even after invocation of BG.

(a) Serve „Show Cause Notice‟ to Branch Head/Head of NTSC/DMRB giving a time period of 15 days to recover the financial loss. This „Show Cause Notice‟ must be served immediately on noticing the lapse.

(b) In case, the concerned officer fails to

recover and thereby causes financial loss to the Corporation, in such case the erring officer(s) will be placed under „Suspension‟ immediately on completion of the notice period of 15 days.

(i) In case of officers to the level of DO and equivalent - Head of Branch/ NTSC/ DMRB.

. (ii) In case of officers to the level of Chief

Manager- Zonal Head / GM( Law & Recovery)/ Head of the Technology Division at Ho.

(iii) In case of officers of DGM level.- Functional

Director. (Refer Office Circular No. SIC/Pers.I/10(10)/08 dated 03.10.2008 and the amendments issued from time to time).

2.2

Allowing the Bank Guarantee to expire

Immediate „Suspension‟ of Custodian holding BG Portfolio and the concerned Branch Head/Head of NTSC/DMRB, immediately on noticing the lapse.

(i) In case of officers to the level of Chief

Manager-Zonal Head / GM( Law & Recovery)/ Head of the Technology Division at HO.

(ii) In case of officers of DGM level:-Functional Director:

(Refer Office Circular No. SIC/Pers.I/10(10)/08 dated 03.10.2008 and the amendments issued from time to time).




Date: 19.09.2014 Page 46 of 124


Notes:

1. In NSIC offices, where no „Custodian of BG Portfolio‟ has been nominated, Branch Head/Head of NTSC/DMRB will act as „Custodian‟.

2. In case designated authority as above fails to take action against the erring officer(s) within the prescribed time frame as mentioned above, action will be taken by the concerned Director (s) against the erring officer(s) and the designated authority.

3. Documents which would form basis for issuing Advisory Memo, Show Cause Notice & Suspension Order/Charge Sheet to the erring officer(s) include MIS Statements/Reports sent by Branches/NTSCs/DMRBs, report(s) of Zonal Heads/Head of Technology Division at Head Office/General Manager (Law & Recovery), observations made by Auditors (Internal / Statutory/Government) in their respective reports, and Inspection by team from Head Office during their visit to concerned NSIC Office.

4. Any irregularity leads to making provision of bad & doubtful debts in the books of accounts will be treated as equivalent to „Financial Loss‟ which would invoke action as mentioned in para 2 of the above table.

5. In case of suspension :

(a) All administrative and financial powers sub-delegated to the suspended Officer(s) shall be withdrawn with immediate effect. The Zonal Head may sub delegate such powers to the next higher suitable officer posted at the Branch /DMRB/NTSC or to any other nearby Branch Head /Officer. In absence of other suitable officer for handing over sub delegation /charge, the same shall automatically vest in with the concerned Zonal Head.

(b) The suspended officer (s)/charge sheeted officer(s) shall not be entitled for drawl of „Allowances‟ and „Performance Related Pay‟ (PRP).

(c) Copy of the suspension order will be forwarded to Head of HR Division at Head Office and concerned Director for providing suitable replacement of manpower.

(d) In case of Suspension(s), Charge Sheet(s) will be issued promptly as per prescribed guidelines.

(e) The officer (s) under suspension can send their request for review of their suspension order to Director (P&M) for consideration by HRMC




Date: 19.09.2014 Page 47 of 124


11. ADJUSTMENTS OF PROCEEDS RECEIVED FROM THE UNIT:

The proceeds received from the unit will be adjusted transaction wise. The oldest transaction will be adjusted first. Even while

adjusting the proceeds transaction wise, the priority for adjustment thereof will be as follows:-

i) Any outstanding towards processing fees and other misc. debits,

then

ii) Any outstanding towards interest on delayed payment, then

iii) Any outstanding towards normal interest, then

iv) Any outstanding towards principal.

12. ANNUAL REVIEW OF LIMITS SANCTIONED TO UNITS

12.1 The limits of Financial Assistance sanctioned / enhanced to the units are subject to Annual review. It has been decided that each

NSIC Office shall review the limits sanctioned to each unit at-least two months before the expiry of the period for which the limit is

sanctioned. Each proposal for renewal of limits would be treated like a fresh sanction of limit and the entire drill for sanction of a

fresh case, as explained above, will have to be carried out. In this

process, proper appraisal and evaluation of the past conduct of the unit, its financial performance and nature of securities available

with the Corporation will be examined while considering the case for renewal of limits. Non submission of the documents within the

stipulated period may be treated as expiry of the limits and sanction of limit thereafter will attract processing charges as

applicable to the new unit.

The sanction for renewal of limits will also be accorded as per the delegation of powers vested to various levels of functionaries for

sanctioning of fresh/enhanced limits as contained in the Manual for Sub-Delegation of Powers.

12.2 In addition to above the following must also be complied with

while considering annual renewal of limits:-

(a) Fresh inspection of the unit has to be conducted.

(b) Total outstanding towards principal at the time of renewal is

within 95% of the Bank Guarantee value before sanctioning the renewals.




Date: 19.09.2014 Page 48 of 124


12.3 The annual renewal of limits in respect of cases sanctioned by Branch Head / Zonal Head / NTSC Head shall continue to be done

by the respective Head of NSIC Office as per the delegation of powers.

12.4 In respect of cases where the limits have been sanctioned by Head

Office, the renewal shall be sanctioned by the respective Zonal Head / Head of NTSC, subject to compliance of all the conditions

w.r.t. renewal of the limits including those mentioned at 12.1 & 12.2 above.

12.5 After carrying out the renewal of limits as per procedure explained

at 12.1 and 12.2 above, supplementary agreements must be

executed (only in case of any change in limit) referring therein the fresh sanction letter(s) issued confirming the terms for renewal of limit.

13. SERVICE DELIVERY SCHEDULE

In order to „Benchmarking‟ the service delivery activities, the following schedule has been defined:

S.

No.

Activity Time Period

(No. of Working Days)

1. Receipt of Application along with prescribed documents.

0

2. Scrutiny of application and documents by the Appraisal

Officer

3

3. Scrutiny of financial parameters by the Head of Finance at the

Branch

3

4. Single communication to the

party listing out therein the deficiencies in the documents

as well as non-receipt of documents.

On or before 7 days from

the receipt of application.




Date: 19.09.2014 Page 49 of 124


S.

No.



5. Removal of deficiencies or Submission of remaining

documents by the applicant unit.

15

6. Ist Reminder to the unit On expiry of 15 days as at sl.no.5 above.

7. IInd Reminder to the unit On expiry of 15 days as at

sl.no.6 above

8. Final communication to the

party for closure of the case due to non-submission of the

documents

After lapse of extended

time period as at sl. No.6 above.

9. Conducting inspection of the unit by the nominated officers.

Within one day after receipt of complete application.

10. Preparation of appraisal note by the Appraisal Officer

Within 3 days on receipt of proposal after conducting

the inspection.

11. Cross checking the financial aspects of the proposal by Head

of the Finance Division.

Within 3 days after having received the proposal from

Appraisal Officer.

12. Putting up of appraisal note by

Appraisal Officer for approval of Branch/Centre level SLC.

Within 1 day after having

received the proposal from Finance Division.

13. Approval by the Branch/Centre

level SLC headed by Branch/Centre Head (in case

the proposal falls within his delegated powers)

Same day after having

received the proposal from Appraisal Officer.

14. Convening of SLC headed by Zonal Head (in case the

proposal falls within delegated

powers of Zonal Head)


Appraisal Officer.

15. Approval of the Proposal by

Zonal level SLC or forwarding the complete set of proposal to

Head Office with its recommendations (in case the

proposal does not falls within delegated powers of Zonal

Head)

Same day after case is put

up to SLC.




Date: 19.09.2014 Page 50 of 124


S. No. Activity Time Period


16. Appraising of proposal by the Appraisal Officer at Business

Development Division, HO.

Within 3 days after receipt of proposal from Zonal

Office.

17. Examination of financial

aspect of the proposal by Finance Division, HO.

Within 3 days after receipt

of proposal from Business Development Division.

18. Communication of the

observations noticed, to the Branch/Centre by Business

Development Division.

Within 1 day after receipt

of proposal from Finance Division

19. Circulating of comprehensive

note by Appraisal Officer to the Committee

Within 1 day from receipt

of all clarifications / documents.

20. The decision of the committee

in case of the non-acceptance of the proposal to be conveyed

by appraisal officer to Branch/Centre.

Same day on receipt of

decision of Competent Authority.

21. Putting up the case to Competent Authority for

approval.

Within 1 day from receipt of recommendations of the

Committee.

22. Conveying the decision of the Competent Authority along

with terms of sanction to Branch/Centre Head

Within 1 day from receipt of decision of the

Competent Authority.

23. Branch/Centre Head to convey

the decision of the Competent Authority along with terms of

sanction to the unit upon receipt of decision from the

Head Office.

Within 1 day from receipt

of decision from the HO.




Date: 19.09.2014 Page 51 of 124


RMA I

– RAW MATERIAL ASSISTANCE AGAINST THE SECURITY OF

BANK GUARANTEE/SDR/FDR.

Procedure for providing of assistance has been explained in para 4 at

page no 16 to 25 above. The guidelines w.r.t. securities which can be accepted are given here under.

To safeguard the assistance proposed to be extended to the units under Raw Material Assistance Scheme, the following liquid Security

should be obtained:-

i. Bank guarantee of approved banks by Head Office. ii. Security Deposit Receipt of NSIC.

iii. Fixed Deposit Receipt of Nationalized Banks.

1 BANK GUARANTEE

Security by way of Bank Guarantee should be from the Banks as approved by Head Office, equivalent to the value of the assistance

including processing fees and interest thereon. Presently the following banks stand approved for accepting their bank guarantees

as security:

i. All Nationalized banks including IDBI Bank Ltd. ii. State Bank of India and it subsidiaries

In addition to the aforesaid banks, Head Office on receipt of the

requests from its Field Offices has approved the following banks for

accepting Bank Guarantee as Security: S.No Name of the Bank Maximum Cap( Rs. In lacs) Head

Office

Approval

valid

up to

Overall Ceiling

per Bank

Individual party-wise Exposure limited to

1 Axis Bank Ltd. No limit 500 31.10.2014 2 Barclays Bank 500 100 31.10.2014 3 Catholic Syrian Bank Ltd 1000 100 31.10.2014

4 City Union Bank 3000 300 31.10.2014 5 HDFC Bank Ltd. No limit 500 31.10.2014 6 ICICI Bank Ltd. No limit 500 31.10.2014

7 IndusInd Bank 1500 300 31.10.2014 8 ING Vysya Bank Ltd 4000 500 31.10.2014




Date: 19.09.2014 Page 52 of 124


S.No Name of the Bank Maximum Cap( Rs. In lacs) Head

Office

Approval

valid

up to

Overall Ceiling

per Bank

Individual party-wise Exposure limited to

9 J&K Bank Ltd 1500 300 31.10.2014 10 Karnataka Bank Ltd 6000 500 31.10.2015 11 Karur Vysya Bank Ltd 3000 300 31.10.2014 12 Kotak Mahindra Bank 5000 500 31.10.2014 13 Lakshmi Vilas Bank Ltd. 1400 300 31.10.2014

14 The Nainital Bank Ltd 1000 200 31.10.2015 15 SIDBI No limit 300 31.10.2014 16 South Indian Bank 2500 300 31.10.2014 17 Standard Chartered Bank 1000 300 31.10.2014 18 The Federal Bank Ltd. 5000 500 31.10.2014 19 Tamilnadu Mercantile Bank 1000 300 31.10.2014

20 Yes Bank Ltd. 2000 500 31.10.2014 21 Citi Bank.N.A. 1000 300 31.10.2014 22 Pragathi Gramin Bank 300 100 31.10.2014 23 HSBC Bank No limit 300 31.10.2014

The approval with regard to the banks in the table given above has been accorded based on the following conditions:

i. The above referred overall ceiling per Bank is for the Corporation

as a whole. The availability of the vacant limit for accepting Bank Guarantees of the concerned bank shall be monitored by

the Banking Division at Head Office. ii. Every Office is advised to obtain prior approval of the Banking

Division at Head Office of the vacant limit available for

acceptance of Bank Guarantees of these banks. iii. On expiry of the validity period mentioned in the table above, the

approval shall stand withdrawn. Thereafter the performance / status of the bank shall be reviewed by the Banking Division at

Head Office on receipt of the recommendation from the concerned NSIC Offices holding bank guarantees issued by the

said bank.

The concerned office will forward their proposal along with latest annual report of the bank to Banking Division; HO Approval for

extension shall be accorded by the Competent Authority based on the merits of the case.




Date: 19.09.2014 Page 53 of 124


1.1 SAFEGUARDS TO BE TAKEN FOR BANK GUARANTEES GIVEN

TO THE CORPORATION

Following instructions should be kept in view in respect of bank guarantees taken by the Corporation:

i The terms & conditions of B/G, its genuineness and validity will

have to be got confirmed from issuing Banks, before release of the sanctioned facility. In all the cases confirmation from the

issuing bank must be obtained in writing to ensure the genuineness of the guarantees received. Copy of the

confirmation letter must be kept in the records. The confirmation should also be obtained from the controlling office of the issuing

Branch of the bank i.e. Zonal Office/Regional Office or Head

Office of the issuing bank.

In order to save on the delays caused due to the response from the controlling office of the issuing Branch of the bank i.e. Zonal

Office/Regional Office or Head Office of the issuing bank, Competent Authority has introduced the following system of

obtaining:

(a) Confirmation from the issuing bank to be given by an officer

other than having signed the Bank Guarantee, or

(b) A copy of the statement of account of the unit indicating debit of Bank Guarantee commission duly signed by such

officer.

In addition in such cases, the letter about having received Bank Guarantee from the particular branch should be sent to the

controlling office of the issuing branch especially mentioning that if the confirmation of issuing bank guarantee by its branch,

is not received within 15 days from the date of issue of letter, the same would be deemed to be considered as „confirmed‟.

Moreover, written confirmation should be personally obtained

from the issuing bank by deputing NSIC officers so that

genuineness of the Bank Guarantee as well as to avoid delay involved in obtaining confirmation by post.




Date: 19.09.2014 Page 54 of 124


ii. The Bank guarantees should be received from the approved

banks in the prescribed format. Any deviations from the laid down format should be made only with the approval of the

competent authority.

iii. On receipt of bank guarantee, the contents of the same should be thoroughly checked by the designated officers in the

Business Development Division along with the Law Division.

The contents of the bank guarantee which have to be specifically be checked are the amount, the period of validity

and claim clause for lodging the claim. If any corrections are required in the bank guarantee, the same should be

immediately returned to the party for obtaining necessary

corrections. Only on receipt of the valid Bank Guarantee should the disbursement be released. Such bank guarantees should be

kept in the safe custody of a designated officer.

iv. For the purpose of minimizing the risk associated with Corporation‟s investment under RMA Scheme, all offices are

advised to obtain the BGs of smaller denomination i.e. not exceeding Rs.1 crore. A single BG of more than Rs. one crore

should not be accepted against the sanction of any limit under the scheme. However, for Uttarakhand & Uttar Pradesh the

limit of BG increased to Rs. 2 crore in view of prevailing stamp duty in these states.

v. All the bank guarantees received should be recorded in the

Security Register (F:FSC:07) and their validity periodically

monitored so that they can either be invoked or their validity can be got extended before their expiry. The responsibility for

monitoring the validity of BG would be done by the designated Officers in the Business Development Division of every NSIC

Offices.

2 SECURITY DEPOSIT WITH NSIC

SDR of cumulative nature can be accepted as security to the equivalent value of the assistance including processing fees and

interest thereon, while extending Raw Material Assistance. The SDR taken as security will also earn interest. The existing rate of

interest (w.e.f. 01.10.2004) on SDR is as under:-




Date: 19.09.2014 Page 55 of 124


Period of SDR Rate of

Interest

1. Upto one year 4.75% p.a.

2. More than one year 5.50% p.a.

The NSIC Offices should take necessary action with regard to the discharge of the Security Deposit Receipt (SDR) by the unit in

favour of NSIC and also obtain a letter of authority from the depositors authorizing NSIC to encash the proceed of the SDR for

adjustment/appropriation in the account of the borrower in case of default by him.

3 FIXED DEPOSIT RECEIPTS OF NATIONALIZED BANKS

Fixed deposits issued by Nationalized banks and State Bank of India

& it subsidiaries can be accepted as security to the equivalent value of the assistance including processing fees and the interest thereon.

The NSIC Offices should take necessary action with regard to the discharge of the fixed deposit in favour of NSIC by getting a lien

marked on the face of the fixed deposit and obtaining a letter of authority from the depositors authorizing NSIC to encash the

proceeds of the deposit for adjustment/appropriation in the account

of the borrower in case of default by him.

Documentation to be completed before disbursement has been explained at para 5 at page no. 26 & 27 above. The procedure to be

adopted while making disbursement against the limit sanctioned has been explained at para 7 at page no 31 & 32 above. The rate of

interest and processing fees has been mentioned at para 8 & 9 at page no 33 to 36 above. It is also necessary that post sanction

monitoring is being done in accordance with the guidelines given in para 10 at page no. 37 to 46 above. The proceeds received from

the units towards the assistance availed by them, will be adjusted as per the priority outlined in para 11 at page no. 47 above. Annual

review of limits sanctioned to the unit will be made in conformity with the details given in para 12 at page no. 47 & 48 above.




Date: 19.09.2014 Page 56 of 124


RMA II

- RAW MATERIAL ASSISTANCE SCHEME: - AGENCY SALE / BULK SUPPLIES

In order to facilitate the MSMEs in procurement of their basic raw

material at a competitive price, the Corporation enters into a

Memorandum of Understanding with bulk manufacturers of certain industrial raw materials. This arrangement is backed by the specific requirements from the MSMEs. In the said arrangement, the

Corporation mobilizes the required raw material for the MSMEs at

most competitive prices and also economizes it further by sharing

certain discounts arising out of the arrangement like quantity discount and other discounts (i.e. MOU discount, Cash Discount &

PSU Discount) available from time to time.

Thus for the procurement of bulk raw material, NSIC enters into

Memorandum of Understanding with the manufacturers of such raw material. The process distribution of material under such

arrangements involves;

i. No material handling by NSIC where by the MSMEs directly

procured from the bulk manufacturers delivery location,

ii. Acts as material handling agencies on behalf of such

manufactures.

Under the scheme for arrangement and distribution of raw material as per allocation made by the bulk manufacturers, MSMEs are

facilitated by arranging raw material as per their requirements. The

scheme on arrangement and distribution of iron and steel is later discussed in detail.

For facilitating the procurement of raw material, the MSMEs can

adopt either of the two payment procedures;

Make advance payment for the material to be procured , or

Avail financial assistance from NSIC against the security of

Bank Guarantee (as per procedure explained at RMA I).




Date: 19.09.2014 Page 57 of 124


RMA – II A AGAINST ADVANCE PAYMENT

Under this arrangement, the business for booking of raw materials on bulk basis is done on receipt of request from the units located all

over India. The following modus operandi is adopted:

a. On the basis of requirements from the MSMEs, the concerned

NSIC office with each MSMEs, signs MOU separately.

Thereafter, composite order is placed on the bulk supplier/

manufacturer of the specific product by the respective NSIC office. Sales Tax Form „C‟/declaration as per local laws is also

issued to the manufacturers against the composite order.

b. Specific request / indent from the unit is received along with the advance payment for lifting of the required material.

Sales Tax Form “C” /declaration as per local laws issued by the unit in the name of NSIC, is submitted at the NSIC Office

facilitating such arrangement. It must be ensured that unit is registered under Sales Tax for the items being purchased. The

request from the unit must also contain the following details:

i. Material specification,

ii. Quantity, iii. Name of the transporter,

iv. Place from where the material is proposed to be lifted. v. Delivery destination

vi. Payment of Service Charges (as applicable)

c. The unit should also give an undertaking that in case of any

delay in the delivery of the materials, the Corporation will not be held responsible.

d. Branch/Centre has to process the delivery indent received

from the unit. Branch/Centre will also ensure receipt of proper „C‟ Form furnished by the unit.

e. Concurrence by Accounts Section confirming the

receipt/realization of advance payment made by the unit.

f. On obtaining financial concurrence, the delivery order is

placed by the Branch/Centre on the bulk suppliers of raw materials. Payment is also released favoring bulk suppliers

along with the delivery order.




Date: 19.09.2014 Page 58 of 124


g. After dispatch of the material, Invoices along with copy of GRs

are received from bulk suppliers by the Branch/Centre/Centre.

h. Branch/Centre endorses the GRs in favour of the associate unit to enable it to take delivery of the raw material.

i. The bill based on the Invoice/GR received from the bulk

suppliers, is prepared & raised on the buyer by the Branch/Centre.

j. Credit Notes in respect of quantity and flat discounts are

received from bulk suppliers. On receipt of credit notes, Branch/Centre should check the amount of discount & forward

to Accounts Section for counter checking/verification. After

obtaining the approval of Competent Authority the credit notes are raised on the concerned units for passing on the

discounts as per the terms of MOU signed between the corporation and the unit.

k. A statement showing the details of material lifted during the

quarter/month is sent to the bulk suppliers by the Branch/Centre for the purpose of periodical reconciliation and

issuance of E -1 form.

l. Branch/Centre to ensure timely receipt of „E-1‟ Form from the bulk suppliers.

m. On the basis of MOU signed between NSIC and the Bulk

Supplier, the MOU Discount (if any) is received at

Branch/Centre, from the bulk supplier through Credit Notes.

n. Respective NSIC offices pass on the benefit of the MOU discount strictly as per the terms of the MOU signed between

NSIC offices and SSI units.

Service Charges

Service Charges @ 0.25% of the value of the material booked is charged from the MSMEs along with the request.




Date: 19.09.2014 Page 59 of 124


RMA–II B AGAINST THE SECURITY OF BANK GUARANTEE

(as explained at RMA I)

RMA - IIC RAW MATERIAL ASSISTANCE SCHEME: - AGENCY SALE

/ BULK SUPPLIES – GODOWN’S OPERATIONS.

NSIC act as intermediary agency for providing the raw material to MSMEs

on behalf of the bulk suppliers (manufacturers). The following modus

operandi is adopted:

1. Concerned NSIC Office hires the godown to facilitate movement of material from the bulk supplier (manufacturer to the buyer).

2. Buyer Unit would directly make the payment to the bulk supplier.

NSIC would not be responsible for any financial involvement.

3. Bulk supplier sends dispatch instructions of the material to NSICs

office/godown for making arrangement for lifting of material on the basis of requirement of buyer unit(s).

4. On receipt of the material from bulk supplier, NSIC office delivers

the material to the buyer unit on receipt of delivery order issued by the Bulk Supplier.

5. Branch/Centre would maintain record for receipt and issue of

material.

6. Respective Branch/Centre would raise the bill on Bulk supplier for service charges on monthly basis on the basis of material received /

lifted during the month as per agreed terms.

7. Hiring of godown and appointment of service provider for managing

the godown activities shall be as per sub delegation outlined in the „Manual on Sub-Delegation of Powers‟ and guidelines contained in

the „NSIC Purchase Procedure‟.




Date: 19.09.2014 Page 60 of 124


RMA II D RAW MATERIAL ASSISTANCE SCHEME: -

AGENCY SALE / BULK SUPPLIES –

SCHEME ON ARRANGEMENT & DISTRIBUTION OF IRON & STEEL FOR MSMEs

1. ELIGIBILITY FOR COVERAGE UNDER THE SCHEME:

1. a The MSMEs engaged in manufacturing activities and

registered with Directorate of Industries / District Industries Centre.

1. b Government Departments are also eligible for supplies out of allocated material.

The overall ceiling for all Government Departments has been kept at 30% of the allocated material.

For eligible units described at (a) above, Ministry of Steel has stipulated that the following documents be obtained:

i) Certificate of MSMEs Registration with Directorate of Industries /

District Industries Center.

ii) Document to certify the assessed manufacturing capacity of each of the MSMEs.

iii) Prima facie evidence in respect of each of the MSME being in

operation. Through this mechanism Ministry of Steel aims to

discourage the units indulging in trading of such materials.

2. ENROLLMENT OF MSMEs :

NSICs Branch/Centre should enroll eligible MSMEs and Government

Departments interested in availing the facility of arrangement and

distribution of iron and steel from the major steel producers. While enrolling such units, their annual requirements (product-wise)

together with the preferred producer of iron and steel should be obtained. To facilitate this process of enrollments, NSIC offices

should create awareness of its facilities through press releases and contacts established with local industry associations and industrial

units for their requirement of iron and steel.




Date: 19.09.2014 Page 61 of 124


3. ALLOCATION BY MINISTRY OF STEEL

Ministry of Steel will allocate the annual quantities based on the

previous year performance.

4. VERIFICATION OF CREDENTIALS OF MSMEs

The basic criteria for a unit to be eligible are that it must be „a

manufacturing unit‟. Any unit indulging in „trading activity‟ must not be provided assistance under any scheme. The documents to

be obtained in order to confirm the eligibility criterion for the units to avail assistance under the scheme has been outlined in the

Financial Services Manual.

It has also been decided that in addition to the documents already

specified, physical inspection at the factory premises of the unit must be carried out once in a year so as to confirm that the unit is

„a manufacturing unit‟. The inspection may be carried out by the Branch/Centre functioning closest to the unit.

5. CREATION OF DATA BANK:

A data bank should be created with every Branch/Centre in respect

of the units who are availing the assistance and / or can be prospective clients under the scheme. Complete details of the unit,

material required, products made etc. can be compiled for all such units. The branches/centres which have been extending this

assistance already have sufficient data base though not in a proper format. The same needs to be structured and properly compiled.

6. INTIMATION OF AVAILABILITY OF MATERIAL:

In order to create larger awareness about the receipt of offer from the bulk producer indicating availability of material, information

should be sent to all units who require such material and details of which are available with the Branch/Centre. The intimation may be

sent through:

a) E-mail (single e-mail so as to simultaneously inform all units). b) Fax message (In case an e-mail address of any unit is not

available).

A copy of such communication(s) should be preserved by the Branch/Centre .




Date: 19.09.2014 Page 62 of 124


7. AVAILMENT OF ALLOCATED QUANTITIES

The major guidelines as issued by the Ministry of Steel and pertaining to the availment of the allocated quantities are given

below:

7.1 To enable the producers to take up proper planning and supply, 25% of the individual allocation shall be treated as

quarterly allocation. The respective NSIC office must register their specific requirement for each product on a quarterly

basis at least 15 days in advance of the quarter.

However, producers may accept registration of quantities

that are at variance of 5% of the annual allocations.

7.2 Based on the registration, the producers shall indicate the offered quantity to the respective NSIC office. The producers

shall endeavor to honour the entire registered quantity. In case the offer is less than the registered quantity, the

balance may be carried forward to the next quarter. However, if the concerned NSIC office fails to lift any part of

the quantity offered by the producers, the same shall be treated as lapsed.

7.3 Permissible limit for supply of allocated materials to

Government Departments will be 30%.

8. BOOKING OF MATERIAL WITH NSIC BY MSME UNIT:

The booking should be taken only when the interested unit submits its request in writing specifying the material required together with

the quantities desired. The request should also be supported by the payment. The payment should invariably by RTGS facility /

Demand Draft. In case, units makes payment by cheque, the request shall be considered only after realization of the proceeds of

the cheque in NSIC account. In case of parties availing financial assistance from NSIC against Bank Guarantee, the request must be

in writing specifying the material required together with the

quantities desired and indicating that the payment to be made out of the limit availed by them under RMA against Bank Guarantee.




Date: 19.09.2014 Page 63 of 124


The receipt of booking at a Branch/Centre shall be completed only

on fulfillment of the procedure explained above. The booking so received must be entered in the „Booking Register‟ in the sequence

of their receipt.

9. BOOKING OF MATERIAL WITH PRODUCERS (AFTER ALLOCATION BY MINISTRY OF STEEL):

9.1 On the receipt of offer from the main producer NSIC offices in the respective State shall intimate the enrolled MSMEs regarding the

availability of the material.

9.2 While booking the requirements, the total value of the quantities

required by each unit shall be ascertained based on the prices informed by the producer. The unit shall be intimated of the

amount so arrived at.

9.3 In case cumulative quantities booked by all units against such

offer turns out to be more than the total quantity offered by the producer, pro-rata supplies shall be made to each unit out of the

quantities available with NSIC. The excess payment from each unit, in such circumstances shall be adjusted against future

supplies. In case the unit so desires, the excess amount will be

refunded to the unit.

9.4 In case the quantities booked by the unit as at 9.2 above are less than the quantities offered by the producer, a decision on

availing the balance un-booked offer shall be taken on the basis of the nature & marketability of items contained in the offer.

Decision to this effect shall be taken by the respective NSIC office in-charge along with the Zonal Head.

9.5 The un-booked quantities mentioned at 9.4 above may be

disposed off to other MSMEs (but engaged in manufacturing

activities) requiring such material.

9.6 Under no circumstances, NSIC shall attempt to sell the material to non-eligible categories viz., traders. If deviation from this

procedure is detected, Ministry of Steel may discontinue the special rebate to the NSIC and supplies shall also be stopped.

9.7 At the introduction of the scheme, it had been decided that :

‘NSIC shall thereafter, within the stipulated time, deposit with the producers the amount required as per offer or equivalent

to the quantities to be lifted, as booked by the units,




Date: 19.09.2014 Page 64 of 124


whichever is lower. It may be noted that bookings shall be

taken to be accepted by NSIC only on the credit to NSIC’s account of the proceeds remitted by the units for booking of their orders. Units making payments through Demand Drafts

may be exempted from this provision’.

This condition has also been reviewed and it has been decided that:

‘the deposit of advance fund with steel producers will be made

in respect of quantity booked by the MSMEs against the offer

by the steel producer for which payments have been received

from the MSMEs even though not credited to the NSIC’s

account i.e. situations of cheques having been received and under collection. However, material may be released only

after the credit of the cheques sent for collection is received in NSIC’s account’.

It has been also decided that in respect of parties who can not

submit the cheques immediately, the option of availing NSIC‟s Raw Material Assistance Scheme against Bank Guarantee can be

offered.

9.8 The material will be made available to NSIC either from the stockyard of main producer or place of delivery will be intimated

by the producer separately.

9.9 The unit will be informed to arrange the lifting of material within a

stipulated time frame and from the place of delivery as intimated by NSIC. All expenses towards weighing, insurance etc., will be

borne by the unit.

9.10 Adjustment of material from one category to another category is permissible subject to availability of the material with the

producer.

9.11 In case the unit fails to lift the material within the time as explained at 9.8 above, NSIC shall be at liberty to dispose off the

material as it deems fit. Any expenses on such disposal or loss due to such material shall to the unit‟s account for which NSIC

shall not be held responsible.




Date: 19.09.2014 Page 65 of 124


9.12 In the event of the materials available for distribution turning out

to be defective / not as per the specifications, the units shall not make any claim on NSIC.

10. TERMS FOR WAGON BOOKING

10.1 Based on the quantities booked on behalf of MSME units,

transportation of material booked can be made through railway wagons, if desired by the units. The material so

transported is either for one unit or for multiple units by combining their requirements.

10.2 In case of booking of material in wagon load, preference

should be given to the booking of the entire material in one

wagon for a single unit. This would enable the avoidance of any discrepancies / disputes arising between units at the time

of distribution of material (e.g. weight of the material / demurrages etc).

10.3 The bookings with the bulk manufacturers for dispatch of

material through railway wagons must be done within the prescribed period so as to avoid the situation of refusal.

10.4 In situations where units desire the transportation through

railway wagons, their request for booking as explained at para 8 above, must also be accompanied by the advance payment

to be made to bulk manufacturers towards wagon booking as per terms of the bulk manufacturer.

10.5 The balance payment made towards wagon booking must be collected from the unit(s) on receipt of intimation from the

bulk supplier for the quantity dispatched in a wagon so as to avoid any demurrage / wharfage.

10.6 On dispatch of the material, the bulk producer informs the

Branch/Centre with complete details i.e. quantity, quality and grade of the material being dispatched. On receipt of these

details if it is noticed that there are discrepancies with respect to the quality and grade, viz. a viz. the order booked,

Branch/Centre should immediately inform the concerned unit about the discrepancy and seek its confirmation about

acceptance / rejection of the material being dispatched. In case the unit rejects and refuses to take the delivery, the




Date: 19.09.2014 Page 66 of 124


same must be immediately informed in writing to the bulk

supplier in order to avoid any liability, demurrage etc. to NSIC.

10.7 Branch must ensure that material being booked is available as

per the allocation made by Ministry of Steel.

10.8 In case the unit is not able to lift the material from railway yard in time, the demurrage, if any, should be fully borne by

the unit and payable at the time of release of material from railway yard.

10.9 The exact amount of demurrages to be charged by the railway

should be known and informed to the unit for making the

payment to Railway towards demurrage / wharfage etc. so as to avoid further penalty on the material.

11. UNITS ROLE WHILE ACCEPTING DELIVERY OF MATERIAL:

Before delivery of material, the unit should be informed in writing wherein it should be made clear that:

a) While accepting delivery of the material, the unit must satisfy itself about the quantity (weight), quality and grade of the

material delivered (refer Form: F:FSC:11), and

b) NSIC shall not be responsible for any discrepancies arising in respect of the deliveries made.

12. SPECIAL REBATE FROM MINISTRY OF STEEL: (formally known

as JPC rebate)

12.1 NSIC will be entitled to special rebate in respect of the quantities lifted by the eligible units as described at para „1‟

above. The special rebate is permissible only in respect of the quantities lifted against the allocated quantities.

12.2 The Special Rebate will be given to NSIC by the main

producers on the materials lifted as referred in para 12.1 above at the time of delivery/ invoice stage. This rebate may

also be released by the main producers by way of a credit note.




Date: 19.09.2014 Page 67 of 124


12.3 NSIC‟s respective office must submit the utilization certificate,(refer Form: F:FSC:08) to the Ministry of Steel by

10th of next month after expiry of the quarter. Non-submission of utilization certificate in time may also disqualify

the NSIC from availing the special rebate. Competent Authority has authorized the Branch/Centre Heads to sign the

Utilization Certificate.

13. MOU INCENTIVES

NSIC may also be required to enter into a MOU with the producer

(s). Through this agreement (i.e. MOU) NSIC shall be entitled to

certain incentives namely the turn over discount and consistency discount. After signing the MOU with producer, incentives accruing

to NSIC on fulfillment of the conditions stipulated in the MOU, will be passed to the units/departments lifting the material under the

scheme. The incentives will be passed on the unit only on receipt of the same from the producers.

14. DISQUALIFICATION FOR AVAILING CONCESSIONS / REBATES

In the following circumstances, the units shall stand disqualified for

the concessions / rebates available under the scheme:

14.1 If the material purchased by the unit is found to be sold in

the open market (as a trader) instead of using the same for its own manufacturing activities.

14.2 In case the unit fails to lift the quantities enrolled of lifting

is less than registered quantity, the unit will not be entitled for refund / adjustment and any other MOU benefits.

14.3 In the above two circumstances mentioned at 14.1 & 14.2

above, the commitment advance standing to the credit of the disqualified unit shall stand forfeited.




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15. OTHER CONDITIONS

15.1 Any change in the terms agreed in the Memorandum of

Understanding signed with the iron & steel producers may have a corresponding effect on the incentives passed on to

the units lifting materials under this scheme. NSIC shall not be responsible for any compensation of any kind to the units

lifting materials under this scheme on account of such change in the Memorandum of Understanding signed with the iron &

steel producers.

15.2 NSIC shall be within its right to bring any change / modification or deletion of any term / condition without prior

notice.

15.3 Ministry of Steel will make allocation of Iron & Steel state

wise. Under no circumstances allocated quantity should be sold in other States.

15.4 Respective NSIC‟s offices will submit necessary sales tax

forms with the steel producers and will also obtain necessary sales tax form from units as per sales tax rules prevailing in

the respective State.

15.5 The sale and purchase will be booked at respective NSIC office and accordingly be shown in sales tax return there.

15.6 A copy of Utilization Certification (for each quarter) must be

sent to the Business Development Division, Head Office.




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RMA –III

RAW MATERIAL ASSISTANCE UNDER LOCK & KEY ARRANGEMENTS

(Presently no assistance is being provided under lock & key arrangement. Reference in the

manual has been made to explain the procedure for disbursements made earlier since in some

accounts outstandings are appearing under this scheme).

1. PURPOSE

Under this arrangement, the raw material(s) procured is stored in the godown of the Central Warehousing Corporation / State Warehousing

Corporation‟s Godowns. The raw material so procured and stored can be provided to the unit after making payments thereof. The unit is , however,

expected to lift the entire material within the maximum time limit of 90 days.

2. TERMS & CONDITIONS :

2.1 MARGIN MONEY

Margin money, ranging from 20% to 30%, shall be payable by the unit on the value of the raw material. Category-wise bifurcation for margin money

to be recovered is as follows:-

i) Ferrous/non-ferrous others scare items of Raw Material :20%

ii) Others allied materials of the nature specified vide (i) above:25% iii) Electronics/Electrical/Chemicals/Food/Packaging &

Pharmaceutical items :30%

In case of imported material where price fluctuation is likely to occur, the amount of earnest money shall be determined on the basis of the landed

cost of the raw material. The range of margin money mentioned above can also be reviewed by looking at various factors influencing the end use of the

material its shelf life and its acceptability in the market.




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2.2 RATE OF INTEREST:

The rates of interest applicable on all the proposals sanctioned / assistance granted on or after 1.5.2003 are:-

Security From 1.5.2003 to 31.10.2003

From 1.11.2003 to 15.6.2004

From 16.6.2004

N.E. Region

Other than N.E.

Region

N.E. Region

Other than N.E.

Region

N.E. Region

Other than N.E. Region

Other than Bank Guarantee

14.00 to 17.00%

14.50 to 17.50%

13.00 to 16.00%

13.50 to 16.50%

12.50 to 15.50%

13.00 to 16.00%

A range of interest rate has been prescribed as above, the interest rate to be charged in each case will be decided after considering the following

factors:-

i) Nature of securities offered by the unit.

ii) Financial position of the unit performance. The benefit of lower range of interest may be provided to the units whose repayment

performance during relevant financial year is very good and there is no default in repayment of Corporation‟s dues.

iii) Experience of party‟s dealing and repayment

iv) In case of units which approach NSIC for assistance for the first time, the higher rate of interest should be charged initially and

subsequently on satisfactory payment performance & dealing, concession in interest can be considered.

v) Profitability position of the NSIC Office- it is to be ensured that the

Office should be able to recover the cost of funds and all the overheads from its revenue income.

The decision in fixing the interest rate should be taken judiciously.

The interest rate if fixed at lower than the higher prescribed rate, justifications with proper reasoning should be recorded on the

relevant file. It should also have the concurrence of local finance head in writing. The Branch/Centre Heads shall, however, take prior

approval of their respective Zonal Heads.




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2.3 DELAYED PAYMENT INTEREST

In case payment is not received within the credit period allowed, higher rate of interest by 2% will be charged towards delayed

payment interest. The interest on delayed payments will be charged on the outstanding principal.

2.4 SERVICE CHARGES

Period Rate

0 to 30 days 1%

After 30 days

for every block of 15 days

0.5%

Service Charges will be recovered in advance before the placement of supply order for raw material to be stored in the godown of CWC / State

Warehousing Corporation.

2.5 SECURITY:

Collateral security in the shape of immovable properties equivalent to 100% value of the raw material is to be taken. It shall also be ensured

that personal guarantee from the Proprietor/Partners/Directors is to be

obtained.

3. FIXATION OF MONETARY LIMIT FOR A UNIT

While processing the application of a unit seeking assistance under the „Lock and Key‟ arrangement, the limit of the total raw material

assistance to be granted, shall be determined taking into consideration the following facts :

(a) Requirement of raw material per quarter in physical and financial

terms,

(b) Time cycle of the raw material consumed for transforming it into finished goods, production capacity of the unit,

(c) Financial status of the company; and

(d) Securities offered by the unit.




Date: 19.09.2014 Page 72 of 124


Utmost care is to be taken in fixing the limits for financial assistance for individual units under „Lock and Key‟ arrangement. Every likelihood of

procurement beyond the required quantities for a period of 90 days must be avoided. Thus, the guiding factor for fixation of limit of a unit will be

its three months requirement of the material and its performance during the last 1-2 years as shown in the balance sheet/profit and loss account

by the unit.

Before deciding for a repeat procurement, it has to be ensured that 75% of the value of the goods procured earlier has been lifted by the unit

within the 90 days period after making payment thereof. It should also

be ensured that value of security available should cover the cost of unlifted Raw Material lying in the godown as well as fresh material to be

procured.

4. PROCEDURES:

4.1 In cases where indigenous material is to be supplied, the date on which the material comes in the godown of CWC / State Warehousing

Corporation will be as the date for calculation of 90 days for lifting the stock.

4.2 In cases where imported material is to be supplied, the procedure

prescribes that the unit has to take all measures to clear the goods from customs immediately. The goods after inspection and clearance from

the custom are stored in the CWC godown, in the presence of NSIC

officials.

A certificate to this effect shall be obtained from the clearing agent that the goods after clearance will be given to the unit only in the presence of

NSIC officials and signature obtained in the counter file. All documents relating to the transaction shall invariably indicate that NSIC has the

exclusive lien on the goods which are the property of the Corporation. As most of the goods are of technical nature and some time it becomes

difficult to identify it, it has been provided that every item of the goods will be given a code number which will appear on the goods and the

same number shall be indicated in the godown where the goods are kept.




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4.3 The unit shall be required to lift the stock against the payment with

interest and service charges within 90 days from the date of storage of the material. The date of storage shall be determined in relation to the

date of forwarding the documents to the clearing agents in case of imported materials. However, the interest will be charged from the date

of payment to supplier. All other charges i.e. insurance charges, godown charges are to be borne by the units.

4.4 The appropriate working of the system of extension of raw material

assistance depends on the evolving of model which ensures that NSIC is not at a loss and all the goods materials in the custody at State

Warehousing Corporation / Central Warehouses are having proper lien of the NSIC.

4.5 It should be ensured that at the place of the godown where NSIC‟s goods are stored, a sign board may be put on, indicating “NSIC has

financed the goods and ownership lies with “NSIC” or (PROPERTY OF NSIC).

4.6 In order to maintain account of the raw material in godown and to keep

a watch over the stock position and its movement to whom assistance is provided, it may be ensured to make out “receipt” and “issue” vouchers

for each transaction out of the total consignment being either imported or indigenously procured.

The designated officer in Business Development Division in various NSIC

offices should physically verify on quarterly basis the stocks of the raw material stored and also ascertain the movement of the raw material

from the godown.

4.7 In accordance with the terms of agreement, the unit is required to clear

all the stock within 90 days from the date of storage. In case, it is not done, the Corporation shall be at liberty to dispose of the material to the

other actual users at risk, cost and responsibility of the assisted unit without prejudice to recover the damages, short falls, if any, that might

be caused on breach of contract on the part of assisted unit.

--x--




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BILL DISCOUNTING SCHEME

SCHEME

1. NAME OF THE SCHEME

The Scheme shall be called as „BILL DISCOUNTING SCHEME‟.

2. SCOPE OF THE SCHEME

The Scheme will cover discounting of bills arising out of genuine trade

transactions i.e. purchase of supplies made by MSMEs to reputed Public

Limited Companies / State and Central Govt. Departments / Undertakings / Private Limited Companies (not traders), engaged in

manufacturing / services activities.

3. SELLERS

Micro, Small & Medium Enterprises engaged in manufacturing activities (Traders will be excluded).

4. BUYERS

i) State and Central Govt. Departments / Undertakings,

ii) Public Limited Companies,

iii) Private Limited Companies.

5. GRANT OF PURCHASER-WISE LIMITS

Purchaser unit(s) may approach NSIC for sanction of annual limits by

furnishing information as per the prescribed application form. Purchaser unit should also provide details about the MSME units who are supplying

the goods/services to purchaser unit (refer Documentation at Sl. No. 8 below).

Bills drawn by MSMEs for the supplies made by them and duly accepted

by the Purchaser will be discounted against security of Bank Guarantee

to be provided by the Buyer, in favour of NSIC.




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6. GRANT OF SELLER-WISE LIMITS

Seller unit(s) may provide bank guarantee in favour of NSIC for availing

assistance under the scheme. Bills drawn by them against their supplies

made, duly accepted by the purchaser will be discounted. Annual limits

can be fixed for such units by obtaining information as per the

prescribed application form.

7. PERIOD OF USANCE OF BILLS TO BE CONSIDERED FOR

DISCOUNTING

The bills shall be drawn by the specified sellers on the buyers and be

presented for discounting within 30 days of dispatch of good by its

sellers. The tenure of the bills shall not exceed 120 days including

maximum unexpired usance of the bill upto 90 days.

8. DOCUMENTATION

i) Agreement Bond to be executed both with the buyer & seller unit.

ii) Bank Guarantee

iii) Demand Promissory note

iv) Letter of Continuity

v) Personal guarantee by the buyer/seller unit

vi) Board Resolution

In respect of cases covered under para 5 above i.e. Grant of Purchaser

wise Limits, the following documents are also to be obtained / executed:

(i) Request of MSME unit(s) to NSIC for discounting of its bills for

supplies made by them to Purchaser Unit. In case, Buyer unit(s)

wants to add new MSME unit, he should furnish the details of such

unit as prescribed under „Documentation‟ (Clause 8).

(ii) Copy of acknowledgement for having filed Entrepreneur

Memorandum with concerned DIC.

(iii) Agreement shall have to be executed both with the buyer unit as

well as with the seller unit. The formats of the above documents

have been prescribed in the Legal Documentation Manual

(MNL:LDOC:01)




Date: 19.09.2014 Page 76 of 124


9. SECURITY:

Bank guarantees issued by banks approved by Head Office. The Bank Guarantee to be obtained should be equivalent to the value of assistance

(including value of the bills discounted, discounting charges & any other

debit lying in the unit‟s account).

Personal guarantee of proprietor, partners of firms and Directors of the company shall also be obtained.

10. DISCOUNTING CHARGES

The rates of discounting charges (%) applicable on all the proposals

sanctioned and / or disbursed under this scheme shall be at par with the

rate of interest being charged under Raw Material Assistance Scheme under the security of Bank Guarantee, which is presently being charged

as follows:

Particulars Effective Rate of

Discounting Charges

(i) Unit having valid SE 1A rating

under NSIC‟s Rating Scheme

11.95% p.a.

(ii) Units having valid SE 2A rating


12.45% p.a.

(iii) Units having valid SE 1B rating


12.45% p.a.

(iv) Other including unrated Units 12.95% p.a.

The discounting charges as mentioned above shall be applicable on the

all proposals sanctioned and disbursed on or after the date of its applicability from time to time. The principal amount outstanding as on

the date of applicability of discounting charges but pertaining to the assistance already granted and disbursed, shall also attract discounting

charges. The revision in the rate of discounting charges as and when applicable, shall be intimated to the units availing assistance from NSIC.

In case payment is not received within the maximum credit period allowed (not exceeding 90 days) for each assistance, higher rate of

discounting charges shall be charged at par with the rate of interest




Date: 19.09.2014 Page 77 of 124


being charged under Raw Material Assistance Scheme under the security

of Bank Guarantee, which is presently being charged as follows:

Period Rate of Additional discounting

charges on the delayed payment

91days & above 1.00% for every cycle of 90 days

However, the above rates will be reviewed from time to time depending

upon market conditions.

11. PROCESSING FEE

(i) Processing fee shall be charged @ 1% p.a to be payable upfront,

after the sanction of credit limit before release of the

assistance.

(ii) In case unit does not pay processing fee upfront, it shall be

deducted from the first payment to be released to the unit

towards discounting of the bill.

(iii) At the time of renewal also, the processing fee shall be charged

@1% p.a.

12. DELEGATION OF SANCTIONING POWERS

On being satisfied about the unit‟s capacity, its need for assistance, the

type of transactions of purchase / sale and the securities offered completion of all formalities and documents as prescribed by the

competent authority, sanction of Bill Discounting Limit is to be done as per sub-delegation of powers to be made in respect of each level of

functionary. Refer Manual on Sub Delegation of Powers.

The scheme shall not cover the bills drawn by sister concerns on each other for availing bill discounting facilities so as to avoid intra-unit

transactions of accommodation nature.

13. APPLICATION FORM

13.1 Sanction of Purchaser wise Limit

The application for the request to sanction limit under the Bill

Discounting Scheme is to be submitted by the Purchaser unit duly signed




Date: 19.09.2014 Page 78 of 124


by the authorized signatory i.e. Director of the Company in duplicate in

the prescribed format (F: FSC: 04(a)). The application should be accompanied by (i) Request of the Seller unit (ii) Copy of

acknowledgement for having filed Entrepreneur Memorandum with concerned DIC.

13.2 Sanction of Seller wise Limit

The application for the request to sanction limit under the Bill

Discounting Scheme is to be submitted by the seller unit duly signed by the authorized signatory i.e. Proprietor / Partner / Director of the Firm /

Company in duplicate in the prescribed format (F: FSC: 04(b)).

14. TERMS OF ASSISTANCE:

14.1 The total limit will be sanctioned after appraising the proposal on the

prescribed appraisal form. The remaining limit would be reckoned in

relation to the face value of bills discounted by NSIC and outstanding at

any time during the financial year.

14.2 The bills shall be discounted maximum upto 99% of the BG value.

Example: If BG of Rs. 1 lac is submitted by the unit, in that case the

maximum value of the bills to be discounted should be Rs. 99,000/- (i.e.

99% of BG value). Discounting charges @ 12.95% (for unrated units) for

90 days shall be deducted on the bill value of Rs. 99,000/-, which comes

to Rs. 3161/-. Further, in case, the unit not paid processing fee upfront

@ 1% p.a. on the BG value of Rs. 1 lac, in that case, Rs. 1000/- on

account of processing fee shall be further deducted and net payment of

Rs. 94,839/- will be released.

14.3 In case, the buyer unit discounted the bills of seller unit and the seller

unit is already availing assistance under Raw Material Assistance against

the bank guarantee from the NSIC, in that case, proceeds of bills

discounted shall not be released to the seller unit and will be adjusted in

his account under Raw Material Assistance against the bank guarantee.

14.2 The bills shall be drawn by the specified sellers on the buyers and executed within 30 days of dispatch of good by its sellers.




Date: 19.09.2014 Page 79 of 124


14.3 The rate of discounting charges under the scheme shall be made

applicable in accordance with the Clause 10 of the scheme.

14.4 The bills submitted for discounting should be accompanied by relative invoices and evidence of dispatch / of railway receipt / lorry receipt /

delivery challan duly signed and stamped as evidence of receipt of goods etc.

14.5 Buyer should satisfy that the officials who would be accepting the bill

have necessary authority to do so, i.e. by passing Board Resolution.

14.6 Buyer and MSMEs seller covered under the facility should have no objection to NSIC advising their bankers for sanction of the above

facility.

14.7 It must be ensured that the assistance is given towards genuine trade

transactions involving discounting of bills of MSMEs for their supplies of

goods / services to buying organizations and not for funding transactions

of “accommodation nature”.

15. ANNUAL REVIEW OF LIMITS SANCTIONED TO UNITS

The limits of Financial Assistance sanctioned to the units are subject to

Annual review. It has been decided that each NSIC Office shall review

the limits sanctioned to each unit at-least two months before the expiry

of the period for which the limit is sanctioned. Each proposal for renewal

of limits would be treated like a fresh sanction of limit and the entire drill

for sanction of a fresh case, as explained above, will have to be carried

out. In this process, proper appraisal and evaluation of the past conduct

of the unit, its financial performance and nature of securities available

with the Corporation will be examined while considering the case for

renewal of limits. Non submission of the documents within the

stipulated period may be treated as expiry of the limits and sanction of

limit thereafter will attract processing charges as applicable to the new

unit.

16. Monitoring:

The following guidelines for pre and post sanction monitoring should be

strictly followed:




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16.1 Before providing assistance to any unit, an appraisal must be made as

per the format laid out for the scheme (refer F:FSC:06). Only after due

evaluation of the party‟s credentials, its repaying capacity, assistance

should be extended. It must also be ensured that all the terms &

conditions attached to the sanction are conveyed to the party which it

must fulfill before the disbursement is made.

16.2 Financial limit should be sanctioned strictly in accordance with the sub

delegation of power as conveyed by the Company Secretary with the

approval of Competent Authority.(refer manual on Sub-Delegation of

Powers-MNL:DOP:04)

16.3 Before accepting bank guarantee as security, its genuineness must be

confirmed in writing from the issuing as well as controlling bank as per

the guidelines already issued in this regard.

16.4 Assistance should be extended within the value of securities available

after considering the principal amount, interest and service charges

thereon. It must be ensured that at no point of time should any

outstanding is left uncovered / unsecured.

16.5 Validity of the Bank Guarantee (period) has to be closely monitored. In

the event of the Bank Guarantee likely to expire and the party failing to

clear its dues, the Bank Guarantee should be invoked unless the party

gets its validity extended before the expiry date.

16.6 The financing under the Scheme should be made only against the bills.

In case where the MSMEs getting payment directly from the purchaser,

NSIC should take recourse to the Bank Guarantee taken as security for

recovery of dues.

16.7 In case payment is not received within the maximum credit period

allowed under the scheme (not exceeding 90 days), prompt action must

be taken to recover the total outstanding over-dues by invoking the

Bank Guarantee available.

16.8 For other vital aspects relating to monitoring mechanism – please refer

to page No. 37 to 46 of this Manual under „Raw Material Assistance

Scheme‟.




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II SERVICE DELIVERY SCHEDULE

In order to „Benchmarking‟ the service delivery activities, the following

schedule has been defined:

S.

No.



1. Receipt of Application along with

prescribed fee and documents.

0

2. Scrutiny of application and documents by the Appraisal Officer

3

3. Scrutiny of financial parameters by the Head of Finance at the

Branch/Centre

3

4. Single communication to the party listing out there in the deficiencies

in the documents as well as non-receipt of documents.

On or before 7 days from the receipt of application.

5. Removal of deficiencies or Submission of remaining

documents by the applicant unit.

15

6. Ist Reminder to the unit On expiry of 15 days as at sl.no.5 above.

7. IInd Reminder to the unit On expiry of 15 days as at sl.no.6 above

8. Final communication to the party

for closure of the case due to non-submission of the documents

After lapse of extended time

period as at sl. No.6 above.

9. Conducting inspection of the unit by the nominated officers.

Within one day after receipt of complete application.

10. Preparation of appraisal note by the

Appraisal Officer

Within 3 days on receipt of

proposal after conducting the inspection.

11. Cross checking the financial aspects of the proposal by Head of the

Finance Division.


Appraisal Officer.

12. Putting up of appraisal note by Appraisal Officer for approval of

Branch/Centre level SLC.

Within 1 day after having received the proposal from

Finance Division.

13. Approval by the Branch/Centre

level SLC headed by Branch/Centre Head (in case the proposal falls

within his delegated powers)

Same day after having





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S. No.

Activity Time Period (No. of Working Days)

14. Convening of SLC headed by Zonal

Head (in case the proposal falls within delegated powers of Zonal

Head)

Within 2 days after having


15. Approval of the Proposal by Zonal

level SLC or forwarding the complete set of proposal to Head

Office with its recommendations (in case the proposal does not falls

within delegated powers of Zonal

Head)

Same day after case is put

up to SLC.

16. Appraising of proposal by the

Appraisal Officer at Business Development Division, HO.

Within 3 days after receipt of

proposal from Zonal Office.

17. Examination of financial aspect of

the proposal by Finance Division, HO.

Within 3 days after receipt of

proposal from Business Development Division.

18. Communication of the observations noticed, to the Branch/Centre by

Business Development Division.

Within 1 day after receipt of proposal from Finance

Division

19. Circulating of comprehensive note by Appraisal Officer to the

Committee

Within 1 day from receipt of all clarifications / documents.

20. The decision of the committee in

case of the non-acceptance of the proposal to be conveyed by

appraisal officer to Branch/Centre.

Same day on receipt of

decision of Competent Authority.

21. Putting up the case to Competent Authority for approval.

Within 1 day from receipt of recommendations of the

Committee.

22. Conveying the decision of the

Competent Authority along with terms of sanction to Branch/Centre

Head

Within 1 day from receipt of

decision of the Competent Authority.

23. Branch/Centre Head to convey the decision of the Competent Authority

along with terms of sanction to the unit upon receipt of decision from

the Head Office.

Within 1 day from receipt of decision from the HO.




Date: 19.09.2014 Page 83 of 124


ELIGIBILITY CRITERIA FOR AVAILING ASSISTANCE FROM NSIC IN THE CONTEXT OF MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT ACT (MSMED), 2006.

The MSMED Act 2006 defines Micro, Small & Medium Enterprises (MSMEs)

based on the investment in Plant & Machinery/ Equipment.

MSMEs desirous to avail assistance under the schemes of Raw Material Distribution and Raw Material Assistance against BGs, the following

procedures has to be adopted w.r.t. obtaining of Entrepreneurs Memorandum:

a) In case of Medium (manufacturing) Enterprises:

As per MSMED Act 2006, it is mandatory for medium manufacturing

enterprise to file memorandum with the notified authority. Hence, all such enterprises, while applying for availing assistance under the schemes of

Raw Material Distribution and Raw Material Assistance against BGs, shall submit Entrepreneurs Memorandum / copy of the acknowledgment of

having filed the „Entrepreneurs Memorandum‟ with the notified authority.

b) In case of Micro, Small Enterprises (Manufacturing or Service)

and Medium Enterprise (Service):

(i) Where it can be ascertained / verified from the audited Balance Sheet of the unit, about its investment in Plant & Machinery/ Equipment so as to

classify it into an MSE (manufacturing or service) or medium service enterprise, the auditor‟s certificate need not to be obtained.

In such case, a self-declaration certifying its category (whether micro

or small or medium) shall be obtained from the unit (its proprietor/ authorized partner/ director).

(ii) However, in case the Fixed Assets Note / Schedule of the Audited

Balance Sheet of the unit do not depict clearly the position of its

category and / or the Investment in Plant & Machinery / equipment is exceeding the prescribed limit and the unit claims to be an micro/ small

enterprise or medium (service) enterprise, the unit should submit a certificate from its auditors certifying its investment in Plant &

Machinery/ equipment as eligible for classifying it as micro/small/medium.




Date: 19.09.2014 Page 84 of 124


FORMS-SHORT TERM FINANCIAL SERVICES Raw Material Assistance/Bill Discounting

S.No. Document No. Document Description No. of

Pages Revision

No.

1. F:FSC:01 Application Form -RMA 6

2. F:FSC:02 Inspection Report 2

3. F:FSC:03 Appraisal Form- RMA 5

4. F:FSC:04(a) Application Form - Bill Discounting (Purchaser wise limit)

7

5. F:FSC:04(b) Application Form - Bill Discounting (Seller wise limit)

5

5. F:FSC:05 Appraisal Form- Bill Discounting 6

6. F:FSC:06 Sanction Letter 1

7. F:FSC:07 Security Register 1

FORMS – IRON & STEEL

S.No. Document No. Document Description No. of

Pages Revision

No.

1. F: FSC:08 Utilization Certificate 2

2. F :FSC:08(i) Annexure-A 1

3. F: FSC:08(ii) Annexure-B 1

4. F: FSC:09 Statement showing the projected demand for the allocation of Steel & Iron

1

5. F: FSC:10 Statement Showing the Projected Demand of Iron & Steel (Unit / Product Wise)

1

6. F:FSC:11 Acceptance of delivery 1




Date: 19.09.2014 Page 85 of 124


F:FSC:01

THE NATIONAL SMALL INDUSTRIES CORPORATION LIMITED

APPLICATION FORM FOR RAW MATERIAL ASSISTANCE

To, The National Small Industries Corporation Ltd. ………………………………………………… ………………………………………………… Dear Sir, I/We desire to avail of the benefits of your following Schemes under "Raw Material Assistance (RMA)" as per your terms and conditions, for my/our business enterprise. I/We certify that the details given in this application are true and correct and no material fact has been concealed or withheld. I/We agree to abide by the terms and conditions of your above scheme(s) including the amendments thereto made from time to time. Yours faithfully ( ) Signature with Official Stamp of Authorized Signatory Name of the Signatory……………………………. (In Capital Letters) Date:………….. Designation of the Signatory……………………… Place :…………. Units name and address………………………….. Residential Address of the Signatory: …………………………………………………. ……………………………………………………. Telephone………………..Fax:……………………

NOTE:

11. The application completed in Block Letters should be submitted in duplicate along with a covering letter on unit's letter head.




Date: 19.09.2014 Page 86 of 124


APPLICATION FORM FOR RAW MATERIAL ASSISTANCE

PARTICULARS OF APPLICANT UNIT

1. Scheme under which assistance is applied : 2. Amount of assistance sought (Rs.) : (mention amount of custom duty separately, if any) 3. Particulars of the applicant unit

Name Constitution Year of Establishment

Address & Tel. No. Factory Regd. Office

4. MSMEs Registration No.________________date_________ Valid up to…………….. . 5 No. & date of Sales Tax / VAT Registration : CST ________________ LST ________________ VAT ____________ 6. Names, addresses, Telephone No. of Bankers & Accounts No(s) of

Applicant unit

Name Address Account No. Telephone No.

7. Whether unit is located in a backward Area/ : Backward/Hilly Hilly Region (Please Tick Mark) Region/None 8. Tick Mark: Whether unit belongs to SC/ST/ Women entrepreneur/Physically Handicapped/Ex- Servicemen/Technocrat.

9. Name & addresses of Sister Concerns: (Names of common Proprietor / Partners/Directors should be mentioned)

10. Particulars of Proprietor / Partners/Directors:

Name Father‟s/ Husband‟s

name

Add-ress

Age Qualifi-cation

Busin-ess Exp.

(yrs)

Tele-phone & Mobile

No.

E-mail Address

Net Worth (Rs.in lacs)

(Use separate sheet if required)




Date: 19.09.2014 Page 87 of 124


APPLICATION FORM FOR RAW MATERIAL ASSISTANCE 11. Line of Activity:

Nature of Project Name of Products being manufactured

12. Requirement of Raw Materials (on annual basis) Description : Indigenous/Imported: Quantity : Value (Rs.) : Name and address of supplier: 13. A. Particulars of financial assistance already received or likely to be received from Banks/FI's:

Name of Financial Institution & Banks

Amount of assistance

Reference No. and date of sanction letter

Repay-ment position

Amount of default/ Overdues, if any

13. B.

i) Have you applied earlier to NSIC: ii) Details of assistance sanctioned earlier:

14. Details of Security proposed: a) In case of Bank Guarantee

S.No Nature of security Value (Rs.)

Name ,address & telephone No. of issuing Bank




Date: 19.09.2014 Page 88 of 124


APPLICATION FORM FOR RAW MATERIAL ASSISTANCE b) Details of Personal Guarantees :

Name & Addresses of Guarantors Net worth / Means (Rs.)

15. Employment generated by the unit (Total nos. of person)

Existing Employment

Additional Employment Total

16. Any other information:

Signature of Authorized Person

With official stamp




Date: 19.09.2014 Page 89 of 124


DOCUMENTS TO BE ENCLOSED WITH APPLICATION FORM 1. A passport size photograph of each of the Proprietor / Directors / Partners / Society

office bearers. 2. Self-attested photocopy of MSMEs registration no.(only for medium enterprises) &

Sales Tax / VAT Registration Certificate. 3. Self attested statement of personal assets and liabilities along with the residential

address of Proprietor/Directors/Partners. 4. Copy of Memorandum & Articles of Association along with list of Directors in case

of Pvt. Ltd. / Ltd. Co. OR

Copy of Partnership Deed duly notarized in case of Partnership concern.

OR

A copy of Bye Laws & charter of society along with a list of Governing body / executive members in case of society.

5. A copy of Board Resolution in case of Pvt./Public Ltd. Co., Power of Attorney in

case of partnership firm & a Governing Body Resolution in case of Society authorizing the signatory to sign and to deal with NSIC in respect of financial assistance required, for and on behalf of the applicant unit.

6. Specimen signatures of authorized signatory attested by bank. 7. Copy of sanction letter for credit limit sanctioned by the FIs/ banks other than the

bank who issued Bank Guarantee. 8. Audited/Provisional financial statements of the unit:

i) Last year Audited financial statements. ii) Provisional current year financial statements.

iv) For startup MSME unit- Projected financial statements duly certified by its Auditors or Chartered accountants

9. Audited financial statements for the last year in respect of sister / associate concern

of the applicant unit, if any. (only when the assistance sought against the security of other than Bank Guarantee)




Date: 19.09.2014 Page 90 of 124


DOCUMENTS REQUIRED FOR RENEWAL OF CASES

1. Request of the unit. 2. List of Directors/Partners/Office bearers of Society, if changed, with respect to

earlier declaration. 3. Audited/Provisional financial statements of the unit: i) Last year Audited financial statements. ii) Provisional current year financial statements.

4. Audited financial statements for the last year in respect of sister / associate

concern of the applicant unit, if any. (Only when the assistance sought against the security of other than Bank Guarantee)




Date: 19.09.2014 Page 91 of 124


F:FSC:02 FORMAT FOR INSPECTION REPORT

1. Name & Address of the Unit (Registered Address)

2. Constitution of the firm:

3. Name of the Director/Partners/Proprietor

Name Age Qualification Experience

4. Address of the godown and its construction position/ Design etc.

5. Name of items being manufactured / assembled : Manufactured Assembled 6. Method of productions (Manual and or with Automatic machines) 7. Description of raw material being used : 8. No. of Employees : a) Professionally Qualified :

b) Technical : c) Secretarial :

9. Investment: i) Land Building value, if owned ii) Machinery & equipment Name of the (Owned or financed Machinery Value through some Agency if financed by some agency indicate, name & address) 10. Name of the Banker 11. Details of the Bank limits, if any: 12. Turnover /Daily/Monthly/ Qtrly: Qty. Value 13. Marketing arrangements:

14. Sales out lets Nos. Qty. Value Sales Daily/Monthly/Qtrly. 15. Cost of Sales:




Date: 19.09.2014 Page 92 of 124


16. Regional Offices and/or branches of the unit: 17. Recommendations of the Inspecting Officers:

(Official from Finance) (Official from Executive)




Date: 19.09.2014 Page 93 of 124


F:FSC:03


APPRAISAL FORM FOR RAW MATERIAL ASSISTANCE 1. Case No. : 2. Name of NSIC Office : 3. Date of Proposal received in NSIC Office : 4. Date of Proposal received in Head Office : 5. Amount of assistance sought : Rs. (mention amount of custom duty separately, if any) 6. Particulars of the applicant unit

Name Constitution Year of Establishment Address & Tel. No. Factory Regd. Office

7. MSMEs (EM) No. _____________________ Date _______ . 8. No. & date of Sales Tax. / VAT Registration : CST ________________ LST _______________ VAT _____________ 9. Experience of past dealing with NSIC / Other Financial Institutions & Banks

(other than bank who issued Bank Guarantee)

Name of Fin. Instts./Bank from where the unit has availed

loan/credit limit (including NSIC)

Nature of assistance/loan limit availed

Amount (Rs.)

Latest Report on Conduct of

Account

10. Whether unit is located in a backward Area/ : Yes/No Hilly Region 11. Tick Mark: Whether unit belongs to SC/ST/ Women entrepreneur/Physically Handicapped/Ex- servicemen /Technocrat. 12.a Name & addresses of Sister concerns : (Names of common Proprietor / Partners/Directors should be mentioned) b Does another company /house holds : a majority Stake




Date: 19.09.2014 Page 94 of 124


13. Particulars of Proprietor / Partners/Directors :

Name Address Age Qualifi-cation

Busin-ess Exp.

(yrs)

Tele-phone & Mobile

No.

E-mail Address

Net Worth (Rs.in lacs)


14. Line of Activity :

Nature of Project Name of Products being manufactured

15. Requirement of Raw Materials (on annual basis) Description : Indigenous/Imported: Quantity : Value (Rs.) : 16. Comments on Factory Inspection Report (Annex Copy of Inspection Report)

17. Details of Security proposed: a) In case of Bank Guarantee

S.No Nature of security

Value (Rs.)

Name ,address & telephone No. of

issuing Bank

Name ,address & telephone No. of Zonal/Regional/Head Office of the issuing Bank




Date: 19.09.2014 Page 95 of 124


b) Details of Personal Guarantees :


18. Financial Position of the Unit including Projections:

S.N Particulars Previous Year(Audited)

(Rs.)

Current Year‟s (Estimated)

(Rs.)

a) Net Sales

b) Net Profit before interest & tax

c) Net Profit after interest & tax

d) Depreciation & other non cash item

e) Cash Profit(c+d)

f) Paid up Capital

g) Tangible Net worth *

h) Term liabilities

i) Capital employed (g+h)

j) Net Fixed Assets

k) Investments

l) Net working capital[i-(j+k)]= m-N

m) Current Assets

n) Current Liabilities

o) Current Ratio (m/n)

*Paid up capital (+) reserve and surplus( -) Dr. balance of P&L A/c( -)Misc. expenditure (assets).




Date: 19.09.2014 Page 96 of 124


19. Recommendations:

Nature of facility to be sanctioned and Amount

Terms and Conditions

Facility Amount

(Rs.) 1. Repayment Period

2. Rate of Interest

3. Processing Fee

4. Security : Nature Value Personal guarantee details:

5. Any other condition

(Appraising Officer) (Head of Finance Deptt.) (Head of Mkt. Deptt.) (Senior Branch. Mgr / Branch. Mgr./Centre Incharge) 20. Examination by State Level Acceptance Committee (SLC)

Date of holding SLC Constitution of SLC:

S.No. Name Designation (*) Organization

1 Sr.Br. Mgr /Br. Mgr.

2 Head of Finance

3 Head of Marketing

4 Head of Recovery

5

*(Refer note 3 below) Recommendation of SLC: (Member) (Member) (Member) (Member)

(Chairman) Of SLC




Date: 19.09.2014 Page 97 of 124


Note:-

i. The Appraisal Form will be filled by the nominated Appraisal Officer. ii. Appraising Officer will coordinate the SLC. iii. In case, the limit to be sanctioned is beyond the power of Branch/Centre Head,

the Zonal General Manager will be the Chairman of SLC. iv. The case to be sanctioned as per the delegation of powers circulated by

Company Secretary as amended from time to time. v. Appraising Officer should follow the guidelines pertaining to “Methodology for

Handling the Credit Proposal” as discussed in this manual.




Date: 19.09.2014 Page 98 of 124


F:FSC:04(a)

APPLICATION FORM FOR ASSISTANCE FOR BILL DISCOUNTING

(For sanction of Purchaser wise limit)

To,

The National Small Industries Corporation Ltd. …………………………………………………

………………………………………………… …………………………………………………

Dear Sir,

I / We desire to avail of the benefits of your following Scheme under Bill Discounting as per your terms and conditions, for my/our business enterprise.

I / We certify that the details given in this application are true and correct and

no material fact has been concealed or withheld.

I/We agree to abide by the terms and conditions of your above scheme(s) including the amendments thereto made from time to time.

Yours faithfully

( )

Signature with Official Stamp of Authorized Signatory

Name of the Signatory…………………………….

(In Capital Letters) DATE:………….. Designation of the Signatory………………………

Place :…………. Units name and address…………………………..

Residential Address of the Signatory: …………………………………………………….

……………………………………………………. Telephone………………..Fax:……………………

NOTE: The application completed in Block Letters should be submitted in duplicate along with a covering letter on unit's letter head.




Date: 19.09.2014 Page 99 of 124



1. Scheme under which assistance is applied :

2. Amount of assistance sought (Rs.)

3. Particulars of the applicant unit

Name Constitution Year of

Establishment

Address & Tel. No.

Factory Regd. Office

4. Constitution of the borrower:

(i) State and Central Govt. Departments / Undertakings

(ii) Public Limited Companies

(iii) Private Limited Companies (only in case of assistance against Bank

Guarantee)

(Please attach copy of the Memorandum and Article of Associations)

5. Details about the Selling MSME units:

Sl. No. Name & Address Constitution MSMEs Registration

No. & Date

6. No. & date of Sales Tax / VAT Registration :

CST ________________ LST ________________ VAT _______

7. Names, addresses, Telephone No. of Bankers & Accounts No(s) of

Applicant unit.

Name Address Account No. Telephone No.




Date: 19.09.2014 Page 100 of 124


8. Whether unit is located in a backward Area/ Backward / Hilly Region /

None Hilly Region (Please Tick Mark)

9. Tick Mark: Whether unit belongs to SC/ST/ Women

entrepreneur/Physically Handicapped/Ex- Servicemen/Technocrat.

10. Name & addresses of Sister Concerns:

(Names of common Proprietor /Partners/Directors should be mentioned)

11. Particulars of Directors of applicant unit :

Name Father‟s/ Husband‟

s name

Address Age Qualifi-cation

Business

Exp.(yrs)

Telephone &

Mobile No.

E-mail Addres

s

Net Worth

(Rs.in lacs)



Nature of Project Name of Products being

manufactured

13. Details about financial assistance required from NSIC.

14. Details of the supplies made by MSME units

(Copy of the order placed on MSME units may also be attached)

Name of Seller organization : ____________________________

Number, date and value of order: ____________________________

Delivery Schedule : ____________________________

Terms of Payment as per Supply Order : ______________________




Date: 19.09.2014 Page 101 of 124


15. Maximum Permissible Finance :

Total value of the order : ___________________________

Less - Finance already available : ___________________________

From Banks / Financial Institutions: ___________________________

Balance Finance required from NSIC: __________________________

16. (A) Particulars of financial assistance already received or likely to

be received from Banks/FI's:

Name of Financial

Institution & Banks

Amount of assistance

Reference No. and date of

sanction letter

Repayment Position

Amount of default/

Overdues if any

(B) i) Have you applied earlier to NSIC:

ii) Details of assistance sanctioned earlier:

17. a) Details of Security proposed:

S.N Nature of security

Value (Rs.)

Name ,address & telephone No. of Bank Issuing Bank Guarantee

b) Details of Personal Guarantees :





Date: 19.09.2014 Page 102 of 124


18. Employment generated by the unit

(Total nos. of person)

Existing

Employment



Signature of Authorized Person With official stamp




Date: 19.09.2014 Page 103 of 124


DOCUMENTS TO BE ENCLOSED WITH APPLICATION FORM

A. Documents required from Purchaser unit.

1. A passport size photograph of each of the Directors along with their

proof of residential address.

2. Self attested photocopy of Sales Tax Registration Certificate.

3. Processing fee as per policy.

4. Self attested statement of personal assets and liabilities of each director.

5. Copy of Memorandum & Articles of Association along with list of

Directors in case of Pvt.Ltd. / Ltd Co.

6. A copy of Board Resolution in case of Pvt./Public Ltd. Co., authorizing

the signatory to sign and to deal with NSIC in respect of financial

assistance required, for and on behalf of the applicant unit.

7. Specimen signatures of authorized signatory attested by bank.

8. Copy of sanction letter for credit limit sanctioned by the bank.

9. Audited/Provisional financial statements of the unit:

i) Last Year Audited financial statements.

ii) Provisional current year financial statements.

iii) Projected financial statements for the next year.




Date: 19.09.2014 Page 104 of 124


B. Documents required from selling MSME units :

1. Request of MSME unit to NSIC requesting for discounting of their bills

being forwarded by the applicant purchaser unit (Details of bill no., date,

value and name of buying organization to be mentioned).

2. A passport size photograph of each of the Proprietor /Directors /

Partners / Society office bearers along with their proof of residential

address.

3. Self attested photocopy of MSMEs & Sales Tax Registration Certificate.

4. Copy of Memorandum & Articles of Association along with list of

Directors in case of Pvt. Ltd. / Ltd Co.

OR

Copy of Partnership Deed duly notarized in case of Partnership concern. OR

A copy of Bylaws & charter of society along with a list of Governing

body/executive members in case of society.


1. Request of the unit along with processing fees as per policy.

2. List of Directors/Partners/Office bearers of Society, if changed, with

respect to earlier declaration.



ii) Provisional current year financial statements.





Date: 19.09.2014 Page 105 of 124


F:FSC:04(b)

APPLICATION FORM FOR ASSISTANCE FOR BILL DISCOUNTING

(For sanction of Seller wise limit)


1. Scheme under which assistance is applied :

2. Amount of assistance sought : (Rs.)


Name Constitution

Year of Establishme

nt

Address & Tel. No. Factory Regd.

Office

4. MSMEs Registration No. _________________ Date ________

Provisional/Final valid up to __________.


CST _________________ LST ___________________ VAT _______

6. Names, addresses, Telephone No. of Bankers & Accounts No(s) of

Applicant unit.

Name Address Account No.

Telephone No.

7. Whether unit is located in a backward Area/ Backward / Hilly Region /

None Hilly Region (Please Tick Mark)

8. Tick Mark: Whether unit belongs to SC/ST/ Women

entrepreneur/Physically Handicapped/Ex- Servicemen/Technocrat.




Date: 19.09.2014 Page 106 of 124


9. Name & addresses of Sister Concerns :

(Names of common Proprietor / Partners/Directors should be mentioned)


Name Father‟s/

Husband‟s name

Address Age Qualifi

-cation

Busines

s Exp.(yrs

)

Telephon

e & Mobile

No.

E-mail

Address

Net

Worth (Rs.in

lacs)


11. Line of Activity

:


manufactured

12. Details about financial assistance required from NSIC

12.1 Details of the orders received (copy of the order received may also be attached)

Name of buyer organization : ____________________________

Number, date and value of order : ____________________________ Delivery Schedule : ____________________________

Terms of Payment as per Supply Order :________________________ 12.2 Maximum Permissible Finance :

Total value of the order : ___________________________

Less - Finance already available : ___________________________

From Banks / Financial Institutions : ___________________________

Balance Finance required from NSIC : _______________________




Date: 19.09.2014 Page 107 of 124


13. A. Particulars of financial assistance already received or likely to be

received from Banks/FI's:

Name of

Financial Institution &

Banks

Amount

of assistanc

e

Reference

No. and date of sanction

letter

Repaymen

t Position

Amount of

default/Over dues

if any

13. B.

i) Have you applied earlier to NSIC: ii) Details of assistance sanctioned earlier:


S.N Nature of

security

Value

(Rs.)

Name ,address & telephone No. of

Bank Issuing Bank Guarantee

b) Details of Personal Guarantees:


15. Employment generated by the unit

(Total nos. of person)

Existing

Employment





Date: 19.09.2014 Page 108 of 124



Signature of Authorized Person With official stamp




Date: 19.09.2014 Page 109 of 124


DOCUMENTS TO BE ENCLOSED WITH APPLICATION FORM

1. A passport size photograph of each of the Proprietor /Directors / Partners

/ Society office bearers along with their proof of residential address. 2. Self attested photocopy of MSMEs & Sales Tax Registration Certificate.

3. Processing fee as per policy. 4. Self attested statement of personal assets and liabilities.

5. Copy of Memorandum & Articles of Association along with list of Directors in case of Pvt.Ltd. / Ltd Co.

OR Copy of Partnership Deed duly notarized in case of Partnership concern.

OR

A copy of By laws & charter of society along with a list of Governing

body/ executive members in case of society.

6. A copy of Board Resolution in case of Pvt./Public Ltd. Co., Power of Attorney in case of partnership firm & a Governing Body Resolution in

case of Society authorizing the signatory to sign and to deal with NSIC in respect of financial assistance required, for and on behalf of the

applicant unit. 7. Specimen signatures of authorized signatory attested by bank.

8. Copy of sanction letter for credit limit sanctioned by the bank. 9. Audited/Provisional financial statements of the unit:

i) Last Year Audited financial statements. ii) Provisional current year financial statements.



1. Request of the unit along with processing fees as per policy.

2. List of Directors/Partners/Office bearers of Society, if changed, with respect to earlier declaration.



ii) Provisional current year financial statements. iii) Projected financial statements for the next year.




Date: 19.09.2014 Page 110 of 124


F:FSC:05


APPRAISAL FORM FOR BILL DISCOUNTING

TYPE OF ASSISTANCE: ________________

1. Case No. :

2. Name of NSIC Office :

3. Date of Proposal received in NSIC Office :

4. Date of Proposal received in Head Office :

5. Amount of assistance sought : Rs.


Name Constitution Year of Establishment

Address & Tel. No. Factory

Regd. Office

7. MSMEs Registration No. ____________________ Date ____________

Provisional/Final valid up to __________


CST _____________ LST ________________ VAT ____________




Date: 19.09.2014 Page 111 of 124


9. Experience of past dealing with NSIC / Other Financial

Institutions & Banks

Name of Fin. Instts./Bank from where the unit has

availed loan/credit limit

Nature of assistance/lo

an limit

availed

Amount

(Rs.)

Latest Report on Conduct of

Account

10. Whether unit is located in a backward Area/ : Yes/No

Hilly Region

11. Tick Mark: Whether unit belongs to SC/ST/ Women entrepreneur/Physically handicapped/Ex- servicemen /Technocrat.

12.a Name & addresses of Sister concerns :

(Names of common Proprietor / Partners/Directors should be mentioned) b Does another company /house holds a majority Stake :


Name Address Age Qualifi-

cation

Business

Exp.(yrs)

Telephone

& Mobile No.

E-mail

Address

Net

Worth

(Rs.in lacs)


Whether promoters possess sufficient & relevant :

experience to run the unit



manufactured




Date: 19.09.2014 Page 112 of 124


15. Details of the order received

Name of buyer organization : _____________________

Number, date and value of order : _____________________ Delivery Schedule : _____________________

Terms of Payment as per Supply Order : _____________________

16. Comments on Factory Inspection Report : _____________________

(Annex Copy of Inspection Report) _____________________


S.No Nature of

security

Value

(Rs.)

Name, address &

telephone No. of Bank Issuing Bank

Guarantee

Name, address &

telephone No. of Zonal/Regional/Head

Office of the issuing Bank

b) Details of Personal Guarantees:


18. Employment generated by the unit (Total nos. of persons)

Existing Employment

Additional Employment

Total

19. Assessment of Maximum Permissible Finance : Total value of the order : _________________________

Less - Finance already available From banks / Financial Institutions: ________________________

Balance Finance required from NSIC: _______________________




Date: 19.09.2014 Page 113 of 124


20. Financial Position of the Unit including Projections:

S.N

Particulars Previous Year

(Audited) (Rs.)

Current Year‟s

(Estimated)

(Rs.)

Next Year‟s

(Projections)

(Rs.)

a) Net Sales

b) Net Profit before interest &

tax

c) Net Profit after interest &

tax

d) Depreciation & other non

cash item

e) Cash Profit(c+d)

f) Paid up Capital

g) Tangible Net worth *

h) Term liabilities

i) Capital employed (g+h)

j) Net Fixed Assets

k) Investments

l) Net working capital[i-

(j+k)]= m-n

m) Current Assets

n) Current Liabilities

o) Current Ratio (m/n)

*Paid up capital + reserve and surplus - Dr. Balance of P&L A/c - Misc. expenditure (assets).




Date: 19.09.2014 Page 114 of 124


21. Recommendations:

Nature of facility to be

sanctioned and Amount Terms and Conditions

Facility Amount

(Rs.) 1. Repayment Period

2. Rate of Interest

3. Service Charges

4. Security : Nature Value Personal guarantee details:

5. Any other condition

(Appraising Officer) (Head of Finance Deptt.) (Head of Mkt. Deptt.)

(Senior Branch. Mgr/Branch. Mgr./Centre Incharge)

22. Examination by State Level Acceptance Committee (SLC)

Date of holding SLC:

Constitution of SLC:

S.No Name Designation

(*)

Organization

Sr.Br. Mgr /Br. Mgr.

Head of Finance

Head of Marketing

Head of Recovery

*(Refer note 3 below)

Recommendation of SLC:

(Member) (Member) (Member) (Member) (Member)

(Chairman of SLC)




Date: 19.09.2014 Page 115 of 124


Note:-

1. The appraisal note as per the format given above will be prepared by the

nominated Appraisal Officer.

2. Appraising Officer will follow the guidelines pertaining to “methodology for handling the credit proposal” as discussed in this manual.

3. In case, the limit to be sanctioned is beyond the power of Branch/Centre

Head, the Zonal General Manager will be the Chairman of SLC.

4. The case to be sanctioned as per the delegation of powers circulated by Company Secretary as amended from time to time.




Date: 19.09.2014 Page 116 of 124


F:FSC:06 Specimen of Sanction Letter

N.S.I.C. Ltd.

To, M/s. A B C

Subject:- Your application dated _____ for proposed assistance under ___

(Name of the scheme)

Sir,

This is with reference to your application dated _____ seeking assistance for value of Rs. _____ under our ______ scheme.

We are pleased to inform you that a limit of Rs. _____ lacs has been sanctioned for

availing assistance under our Raw Material Assistance/ Bills Discounting Scheme on the following terms & conditions:-

1. Maximum repayment period : 90 days 2. Rate of interest : ___

3. Processing fee (Non-refundable) : ___

4. Security : Bank Guarantee equivalent to the value of limit sanctioned from any Nationalized Bank/Approved Bank of NSIC on the

prescribed format. 5. You are also requested to execute the following documents prior to availment

of sanctioned limit: (a) (b)

6. You are also informed that the principal amount of assistance to your unit will be extended maximum upto 95% of the Bank Guarantee value (in case of

payment on account of processing fee before release of assistance) or 94% of the Bank Guarantee value (in case of non-payment of processing fee by you before release of assistance & your account is debited with the processing fee).

Please sign the one copy of sanction letter in token of having accepted the above terms & conditions and return the same to us.

7. You are requested to complete the above formalities at the earliest for early

availment of sanctioned limit.

Thanking you,

Yours faithfully,

(Head of NSIC Office)




Date: 19.09.2014 Page 117 of 124


F:FSC:07

Security Register

I. In respect of Bank Guarantees/FDR/SDR

Name of the party Scheme Sanctioned limits Bank Guarantee No./Date/Bank/ Value/Valid upto

Forwarded for safe custody

(1) (2) (3) (4) (5)

Name & Designation of the custodian

Letter reference w.r.t. confirmation from issuing & controlling office of the bank

Letter reference w.r.t. renewal of the Bank Guarantee

Details regarding Invocation of BG/FDR

Remarks

(6) (7) (8) (9) (10)

II. In respect of Immovable Property

Name of the party

Scheme Sanctioned limits Location of the property

Value of the property by approved valuer

(1) (2) (3) (4) (5)

Date of valuation

Name of the approved valuer

Details about the Non Encumbrance certificate

Details about creation of charge with ROC in favour of the Corporation

Details about forwarding of Property documents to Accounts Division for safe custody indicating name & designation of custodian

Rem- arks

(6) (7) (8) (9) (10) (11)




Date: 19.09.2014 Page 118 of 124


F: FSC: 08

UTILIZATION CERTIFICATE

STATEMENT OF PROCUREMENT AND DISTRIBUTION OF IRON & STEEL FOR THE QUARTER ENDED...........................................

1. Name of Corporation : 2. Opening Balance (in MT):S

3. Quantity Registered/offered and lifted during the quarter:

Annual Allocation

Qty.registered by NSIC for the Quarter

Qty. offered by Producers for the Quarter

Qty lifted by NSIC during the quarter

SAIL

RINL

IISCO

TISCO

SAIL

RINL

IISCO

TISCO

SAIL

RINL

IISCO

TISCO

JOIST

CHANNEL

ANGLES

ROUNDS

TOR/TISCO/TMT

WIRE RODS

PLATES

H R COILS

CR COILS

HR/BP SHEETS

G.P.SHEETS

G.C.SHEETS

BILLETS

SHEET PILING

SKELP

LPG SHEET

Total:

4. Total Quantity lifted during the Quarter:

5. Quantity supplied to MSMEs . (In MT):

(Details in Annexure „A‟)

6. Quantity supplied to Non MSMEs (in MT)




Date: 19.09.2014 Page 119 of 124


7. Quantity supplied to Govt. Deptts (in MT) (Details in Annexure „B‟)

8. Quantity Unsold (in MT)

9. Rebate availed (in Rs.)

Signature of Zonal Head




Date: 19.09.2014 Page 120 of 124


F:FSC:08(i)

ANNEXURE-A

S.No. Name & complete Address of MSMEs to whom Material Released

Name of material issued

Qty. issued





Date: 19.09.2014 Page 121 of 124


F:FSC:8(ii)

ANNEXURE B

S.No. Name & complete Address of Govt. Dept. to whom Material Released

Name of material issued

Qty. issued





Date: 19.09.2014 Page 122 of 124


F:FSC:09

Statement showing the projected demand for the allocation of Steel & Iron for the year 2005-06 for the name of the.............................. State. NAME OF PRODUCERS S.N Material SAIL RINL TISCO ISSICO TOTAL

1 Joist

2 Channels

3 Equal Angles

4 Rounds

5 TOR/TISCON/TMT

6 Wire Rods

7 Plates

8 HR Coils

9 CR Coils

10 HR/BP Sheets

11 G.P.Sheets

12 G.C.Sheet

13 CR Sheet

14 Billets

15 Flates

16 Skelp

17 LPG Sheet

18 Sheet Piling

19 Pig Iron

20 CQ Plates

21 High Carbon Wire Rod*

Total:




Date: 19.09.2014 Page 123 of 124


F:FSC:10

STATEMENT SHOWING THE PROJECTED DEMAND OF IRON & STEEL (UNIT/PRODUCT WISE) FOR THE YEAR 2005-06 FOR THE STATE OF ______

SL. Name of Unit Joist Channel EQ Angle Rounds TMT/TOR Wire Rod Plates HR Coils CR Coils Billets LPG Sheets

Pig Iron Total

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15 TOTAL




Date: 19.09.2014 Page 124 of 124


F:FSC:11

(On unit letter head)

Date:___________

To, Senior Branch Manager/Centre Head

National Small Industries Corporation Ltd.

Sub: Acceptance of Delivery

Dear Sir,

This is with reference to our request letter dated__________for booking of

_______ MT. of Iron & Steel material of SAIL / RNL.

In this regard, we confirm our acceptance of the materiel delivered by you as per given below:

Sl. No. Description of the material Grade Quantity (MT)

1.

2.

3.

4.

5.

6.

Thanking you,

Yours faithfully

(Name & Signature of the Authorized person) with Seal & date