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:
process requires very high level of skilled workers or
process requires large quantities of water and/or
- 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
- 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.
ACQUISITION OF MACHINERY & EQUIPMENT.
PURPOSE & QUANTUM OF THE LOAN
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.
MARGIN / EARNEST MONEY
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
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
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:
||Mortgage of Immovable Property
covering the entire value of assistance.
||25% Security Deposit and
Mortgage of Immovable Property for the remaining value of
Personal guarantee of proprietor/ partners of firms and directors of the
company shall also be obtained.
RATE OF INTEREST
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 FOR TIMELY PAYMENT
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.
DISBURSEMENT OF LOAN
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.
ELECTRICITY & POWER
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.
OTHER TERMS AND CONDITIONS FOR AVAILING TERM LOAN
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
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
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.