PROCESS SELECTION Once the product is finalised, choices of process technology emerge. In some complex products, process know how has to be imported from foreign collaboration. In such cases agreements for technology transfer should be made with due care to safeguard one's interest. A lot of appropriate technology is being developed at CSIR and Defense Research Labs and some of this technology can now be bought from: Such indigenously developed process know how has intrinsic benefits such as appropriateness and relative inexpensiveness. While checking out on a process technology, the following things need to be considered with utmost care:
  • Whether process requires very high level of skilled workers or Complex machines?
  • Whether process requires large quantities of water and/or Power?
  • The patents requirements need to be looked into in the context of whether any process or product patent need to be honoured while utilising the selected process technology.
  • Any special pollution or environmental regulations one is required to honour while using the selected process technology.
  • Finally, the appropriateness to the indian environment and conditions.



    The Machinery and equipment required for the new/ existing units shall be considered for financing under the Term Loan (TL) schemeof NSIC upto the maximum limit of Rs. 5 lacs.


    The assistance under this scheme will be limited to new/ existing small scale industries and tiny units including for expansion/ technological upgradation. The unit is required to submit SSI registration certificate along with the application. Small-Scale Units which have already taken assistance from NSIC in the past and have a good track record of timely payment of the dues, may also be considered for sanction of assistance under this Scheme, even if, they are graduating and moving out of the ambit of Small-Scale Industry. This, however, shall be decided by the Competent Authority at Head Office on case to case basis.


    The 20% margin on financing shall be paid by the unit towards Earnest Money by way of cheque / draft. However, in case of special equipments viz., photocopiers, US / CT Scanners etc. and other such equipment having high obsolescence the earnest money shall be 35%.

    In case of Special categories of entrepreneurs i.e. Schedule Caste/Schedule Tribes/Women Entrepreneurs the Margin on Financing to be paid by the unit shall be 15%. However in case of special equipments the Earnest Money shall be 30%.


    The loan in respect of Machinery & Equipment shall be repaid during a period of five / three years in monthly / quarterly installments depending upon the internal generations of the project. The interest shall have to be paid in monthly / quarterly installments as agreed upon by the unit immediately after the disbursement of loan.


    The gestation period of 6 months to 12 months shall be granted to the existing / new units depending upon their internal generations.

    In case of certain type of machines which become operative immediately on installation in the service sector industry and job order establishment, a gestation period of only 6 months shall be allowed both to the New and Exiting Units.


    The Corporation shall have the right to either accept or reject any request from the borrower to make any premature repayment of loan or any part thereof.

    Provided that in case Corporation accepts such request of repayment, the borrower shall give to Corporation prior notice in writing of at least 30 days and its intention to repay in advance on the due date and pay to the Corporation, if it so directs, a commitment charge for premature repayment of principal sum or part thereof, calculated at the rate and in the manner to be decided by the Corporation, whose decision shall be final.


    In addition to the first charge on the assets considered for financing, the unit shall have two options for providing collateral securities in respect of the assistance sanctioned:

    Option Security
    I) Mortgage of Immovable Property covering the entire value of assistance.
    II) 25% Security Deposit and Mortgage of Immovable Property for the remaining value of assistance.

    Personal guarantee of proprietor/ partners of firms and directors of the company shall also be obtained.


    The revised rate of interest would be as under w.e.f. 13/10/2008 :

    a) Assistance against the security of BG/SDR/FDR : 15.5% p.a

    b) Assistance against the security other than those mentioned above : 17.5% p.a. to 20.50% ( in such cases high Power Acceptance committee at H.O. is empowered to fix the rate of interest on case to case basis.)

    The rate of interest on the delayed payment is enhanced from 2.5% to 3.0% to be changed over and above the normal rate of interest.


    Rebate of 0.5% per annum shall be allowed on the above interest rates in case all installments are paid on or before the due date by the unit. This rebate for timely payment shall be passed on to the unit at the end of the repayment period.


    The disbursement shall be directly made:

    a)To the seller of factory shed, or
    b) In case of construction of Building to the contractor
    c) In case of construction of Building carried out by the unit itself, to the supplier of materials,
    d) In case of Machinery & Equipments to its suppliers.

    A lump sum processing fee @ 1% shall be charged. The Applicant unit shall pay 25% of this fee along with the application. The remaining 75% of the fee shall be recovered from the unit after the sanction of the loan but before the issue of delivery instructions/disbursement of the loan. In case of rejection of proposal, the 25% fee paid by the unit along with the application shall not be refunded.


    Insurance Charges @ 2% of the credit facility sanctioned shall be recovered in advance from the borrower towards insurance and the actual insurance charges incurred by the corporation shall be adjusted by it. Any short fall against the actual amount spent by the Corporation for insurance shall be payable by the borrower. The insurance cover shall be in the name of the unit with NSIC as beneficiary.


    The building should be situated in industrial conforming area or developed by the state corporation etc.


    The unit shall obtain No Objection Certificate from appropriate Pollution Control Board well before disbursement & commencement of project, wherever required.


    The unit shall obtain the requisite power load sanctioned before the first disbursement against the machinery & equipment. However, in case if the unit wants to have standby arrangement with Generator Set, the reflection of the same should be in the project report.


    The application for the TL is to be submitted by the party duly signed by the authorised signatory i.e. Proprietor/Partner/ Director of the firm/ company in duplicate in the prescribed format.


    1. The installment of the term loan shall be payable equally at quarterly/monthly rest (as agreed upon) along with interest due for the quarter/month. Further the unit shall pay to the Corporation interest on loan advanced/to be advanced at such rate as may be allowed by the Corporation and the revised/enhanced rate by the Corporation from time to time and made effective by the Corporation with effect from such dates as may be prescribed by the Corporation.

    2. The borrower has to submit post dated cheques of all installments plus interest amount, bearing dates of each respective quarter/month on which installment falls due and becomes payable. The required undertaking for encashment of cheques in this regard is to be taken.

    3. If any principal and/ or interest due or any part thereof remains unpaid on the dues dates, an additional penal interest @ 2% p.a. over & above the normal rate applicable shall be charged on defaulted amount and for the defaulted period with quarterly/monthly rest (as agreed upon).

    4. The borrower shall give right to NSIC to enlist its name and particulars as defaulted borrowers on the website of NSIC in event of defaults.

    5. That the unit shall not appropriate the profits unless it has cleared or made a provision for clearance of the overdue of NSIC's loan and interest etc. thereon.

    6. That in case the cash accruals of the unit improve in future, the repayment schedule may be accelerated accordingly.

    That the Corporation shall be at liberty to inspect and check, the books of accounts of the unit and it will render all help and produce all books of accounts for his explanation from unit.

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